Case Summary:
Company E is developing educational software for the primary and secondary school markets. In order to maintain the market place the owner entrusted the
Person P after observing the market trends analyze that the stock price of the company may rise in future thus, cannot raise the new capital and also due to the high interest rates and B rating of the firm it cannot issue the debt instruments. The Person P came up with three alternatives,
To determine: The manner in which convertible bonds reduce agency costs.
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