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Proportion-equity issued to total amount of equity capital

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Reference no: EM131713207

Question: An analyst makes the following statement: "A firm should add the total capital raised in a convertible bond issue to its debt balance when estimating the cost of capital and should ignore the equity portion until the bonds have been converted, at which time the firm should add the proportion of equity issued to the total amount of its equity capital." Assess this statement.

Reference no: EM131713207

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