One difference between a regular bond and a convertible bond is that a regular bond has

Question

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A convertible bond typically offers a lower interest rate compared to a regular bond because it provides the option for the bondholder to convert the bond into shares of the issuing company's stock. This means that the bondholder takes on more risk by giving up a fixed income stream for the potential of capital gains from the stock. Therefore, to compensate for this added risk, the bond issuer typically offers a lower interest rate.

One Difference Between a Regular Bond and a Convertible Bond