Bonds that may be exchanged for common stock at the option of the bondholders are called

Question

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Bonds that may be exchanged for common stock at the option of the bondholders are called convertible bonds. It gives the bondholder the option to convert the bond into a predetermined number of shares of the issuer's common stock at a specified conversion price. This option provides the bondholder with the opportunity to participate in any future appreciation in the issuer's stock price.

Bonds That May Be Exchanged for Common Stock at the Option