Concerning convertible bonds,which one of these statements is false?
A)The value of a convertible bond can be greater than its straight bond value.
B)The value of a convertible bond may be greater than its conversion value.
C)A convertible bond can be separated into two distinct securities.
D)The coupon rate on a nonconvertible bond will generally exceed the coupon rate on an otherwise identical convertible bond.
E)An increase in the conversion price lowers the conversion ratio.

Question

Quizplus · Accepted Answer

A convertible bond is a single security that offers the holder the option to convert it into a predetermined number of shares of the issuing company, rather than being separable into two distinct securities.

Concerning Convertible Bonds,which One of These Statements Is False