Loan capital which can be converted into equity capital at the option of the holder is known as:

Question

Quizplus · Accepted Answer

Convertible loan stock is loan capital that can be converted into equity capital at the option of the holder. Preference shares are a type of equity capital and cannot be converted into loan capital. Convertible preference shares are a type of preference share that can be converted into equity capital, but not the other way around. Warrants are a type of financial instrument that gives the holder the right to buy shares at a certain price, but they are not a form of loan capital that can be converted into equity.

Loan Capital Which Can Be Converted into Equity Capital at the Option