2. What does conversion feature allows the bondholder to do and when is the best time to exercise the conversion feature? (2 marks)
3. Assuming your company is considering issuing bonds or shares and you realized both bondholders and common stockholders require the same rate of return of 10%. If you are the issuer, which is the better option in terms of effective cost, issuing bonds or common stocks, in meeting the required return of the bond or stockholders? Why? (2 marks)
