(Answered) 1if an optimal capital structure exists what are the

Finance

1.If an optimal capital structure exists, what are the reasons why too little debt is as undesirable as is too much debt?

2.How does a sinking fund function in the retirement of an outstanding bond issue?

3.What are some examples of restrictive covenants that might be specified in a bond’s indenture?

4.Define the following terms that relate to a convertible bond: conversion ratio, conversion value, and straight bond value.

5.If a convertible bond has a conversion ratio of 20, a face value of $1,000, a coupon rate of 8 percent, and the market price for the company’s stock is $15 per share, what is the convertible bond’s conversion value?

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