Convertible bonds have a provision that gives the bondholder an option to convert each bond owned into a fixed number of shares of common stock.

Question

Quizplus · Accepted Answer

Convertible bonds do have a provision that allows the bondholder to convert the bond into a fixed number of shares of common stock. This feature makes convertible bonds an attractive investment option for investors who want the potential for capital appreciation through stock price increases, while still receiving regular interest payments.

Convertible Bonds Have a Provision That Gives the Bondholder an Option