Concerning convertible bonds,which of the following statements is not correct?
A) With regard to security, most convertible bonds are secured by common stock (i.e., they are collateral trust bonds).
B) For most convertible bonds, the issuing firm can, under certain circumstances, effectively force bondholders to convert to common stock.
C) When a convertible bond is called, the owner has the option of receiving cash or stock for the bond.
D) All of these are incorrect.
E) All of these are correct.

Question

Quizplus · Accepted Answer

Most convertible bonds are not secured by common stock. In fact, convertible bonds are typically unsecured debt, meaning they are not backed by collateral. So, statement A is the incorrect statement.

Concerning Convertible Bonds,which of the Following Statements Is Not Correct