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Sir there is an mcq in kit that compared to ordinary secured loan notes which of the following is true when considering convertible secured loan notes.
The answer is that they are less expensive to service because of their equity component. Can you please explain me this?
This is getting annoying because I actually say in the lecture why convertibles are attractive to investors and to the company – you cannot expect me to keep writing my lectures out here.
Investors find convertibles attractive because they will get the benefit of increases in the share price. Therefore they will accept lower interest payments each year. Therefore it costs the company less in interest.
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