QUESTION 7

Which of the following statements about convertible securities is/are correct?

1. Convertible bonds usually have a higher interest rate than ordinary bonds

2. The conversion of convertible bonds increases a company's gearing level

3. When convertibles convert, they do not allow a company to raise further finance

Options

A (1) and (2) are correct

B. (3) is correct

c. All three statements are correct

D(2) and (3) are correct

E (1) is correct