Convertible bonds are attractive to investors because
A)the issuing company cannot retire the bonds before maturity.
B)they can be converted into stock by the issuing company.
C)they usually carry a higher rate of interest than non-convertible bonds.
D)they usually carry a lower rate of interest than non-convertible bonds.
E)they can be converted into stock at the holder's option.

Question

Quizplus · Accepted Answer

Convertible bonds are attractive to investors because they give the option to convert the bond into stock at the holder's discretion. This provides the potential for capital appreciation and the possibility of a higher return than just receiving interest payments on a traditional bond.

Convertible Bonds Are Attractive to Investors Because