Occasionally it is said that issuing convertible bonds is
better than issuing stock when the firms shares are
undervalued. Suppose that the financial manager of Decent
Furniture Company does in fact have inside information
indicating that the decent stock price is too low. Decent
furniture earnings will in fact be higher than investor’s
expectations. Suppose further that the inside information
cannot be released without giving away a valuable
competitive secret. Clearly, selling shares at the present
low price would harm Decent’s existing shareholders. Will
they also lose if convertible bonds are issued? If they do
lose in this case, is the loss more or less than it would
be if common stock is issued?
Now suppose that investors forecast
earnings accurately, but still under value the stock
because they overestimate Decent’s actual business risk.
Does this change your answer to the questions posed in the
preceding paragraph? Explain.
- 0 Answers
- 2201 Views
- OGDCL, I also Faced
- E-Mail Answers
No Answer is Posted For this Question
Be the First to Post Answer
what is LIFO method & procedure ? How you can calculate it ? What is Fund flow ? & what is Cashflow method ? whais is the use fund flow & cash flow in company?
what is form No.32 in MCA?
5 Answers AV Bistro Private Limited, Harit Path, Hero Mindmine Institute,
what is the difference between public company and private company
Hi I would like to know about TDS on Service Tax invoices.We are in rental basis shopping mall.We will raise the bill with service tax.2 types of invoice 1 Rental Invoices with service tax 2. Comman Area charges with service Tax Please let me know how the tenant need to deduct the TDS On gross or Basic.......?
Two charities are setting up a joint fund raising operation. How do you account for this?
what is surrender of shares?
If you have a charitable parent company, limited by guarantee, and a trading subsidiary, which is also a company, which accounts will have to be prepared for the parent company?
hi Please help me for my interview in syntel so please guiad
1) What is the steps of delisting the listed company 2) How to spliting the listed company shares 3) Which way the company should function when it has paidup capital is equal or more than 5,00,00,000/- (I mean which way the company should do it work in the company Act 1956. Is the company have to appoint a CS and and managing director of a any other things which is compulsory for these kind of company which paid up capital is 5,00,000/-
I am Simrat Kaur. I am persuing graduation from P.U. I have an experience of 14 months as a CSA. But i hav an experience letter of 6 months.But I can show my joinin letter of the other job. I hav knowledge of basics of computer & internet. Actually, m findin job in chandigarh. I am findin the right opportunity. so, Can u plz help me in findin the right job?? Can u plz tel me abt where interviews r goin on?
If you have a charitable company, limited by guarantee, and a trading subsidiary, which is also a company, how do you consolidate the accounts?
What is Amalgamation
Audit 
