The primary issuers of convertible bonds are smaller than top-grade companies.

Question

Quizplus · Accepted Answer

Convertible bonds are often utilized by smaller companies as a way to raise capital because they can offer a higher yield than traditional bonds, attract a wider range of investors, and potentially reduce the overall cost of capital. Top-grade companies are more likely to issue traditional bonds as they have a stronger credit rating and can easily attract investors without the added incentive of convertibility.

The Primary Issuers of Convertible Bonds Are Smaller Than Top-Grade