The principle device used by the corporation to force conversion
A) is setting the conversion price above the current market price.
B) is reducing the amount of interest payments.
C) is buying bonds back at below par value.
D) is a call provision.

Question

Quizplus · Accepted Answer

A call provision allows the corporation to force the conversion of bonds into equity at a predetermined price, regardless of the current market price. This is the most common device used by corporations to force conversion. Options A, B, and C do not directly relate to forcing conversion.

The Principle Device Used by the Corporation to Force Conversion