Convertible bonds can be converted into stock at the bondholders' option, which can result in an interequity transaction. Therefore, both option B and C are correct. Option A is incorrect as convertible bonds do not have a specific future date where the company needs to pay the bondholders an amount equal to the market price of the bonds.

Solved

Convertible Bonds

Question 97

Multiple Choice

Convertible bonds:

A) require the company to give the bondholders an amount equal to the market price of the bonds on a specific future date
B) can be converted into stock at the bondholders' option
C) can result in an interequity transaction
D) both b and c are correct

Correct Answer: