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Investing Glossary:
Exchangeable
Copyright 2010,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Definition: |
| Applies mainly to convertible securities. Means the issuer, if so stated, may substitute a convertible Debenture for an existing convertible preferred with identical terms. Most often used when a Corporation has an immediate need for equity Capital and a low tax rate, and expects either or both conditions to change. This would make the debenture less attractive if the Interest tax-deductibility is lost.
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