Forced conversions of convertible bonds occur when unethical corporate executives call corporate bonds prematurely.

Question

Quizplus · Accepted Answer

Forced conversions of convertible bonds typically occur when the issuing company exercises its right to call the bonds before maturity because the stock price has risen significantly, not necessarily due to unethical behavior by corporate executives. This is a feature built into the terms of the convertible bond.

Forced Conversions of Convertible Bonds Occur When Unethical Corporate Executives