Amram Inc. can issue a 20-year bond with a 6% annual coupon. This bond is not co

Question

Amram Inc. can issue a 20-year bond with a 6% annual coupon. This bond is not convertible, is not callable, and has no sinking fund. Alternatively, Amram could issue a 20-year bond that is convertible into common equity, may be called, and has a sinking fund. Which of the following most accurately describes the coupon rate that Amram would have to pay on the convertible, callable bond?

Exactly equal to 6%.
It could be less than, equal to, or greater than 6%.
Greater than 6%.
Exactly equal to 8%.
Less than 6%.

Explanation / Answer

It could be less than, equal to, or greater than 6%.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.