The conversion feature of a bond is a feature that is included in all corporate bond issues that gives the issuer the opportunity to repurchase bonds at a stated price prior to maturity.

Question

Quizplus · Accepted Answer

The statement is incorrect. The conversion feature of a bond allows the bondholder to convert the bond into a specified number of shares of the issuer's common stock. It is not related to the issuer's ability to repurchase bonds prior to maturity. Some bonds may have a call feature that allows the issuer to repurchase bonds at a stated price prior to maturity, but this is not a universal feature of all corporate bonds.

The Conversion Feature of a Bond Is a Feature That