When a corporation issues a bond that can be exchanged for common shares at a later date,the company has issued which of the following type of bond?

Question

Quizplus · Accepted Answer

Convertible bonds allow bondholders to convert their bonds into a predetermined number of the corporation's common shares at a later date, at the bondholder's discretion. This feature adds potential equity upside for the bondholder, while also allowing the corporation to raise capital through bond issuance without immediately diluting existing shareholders.

When a Corporation Issues a Bond That Can Be Exchanged