Convertible bonds are attractive to bondholders because

Question

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Convertible bonds can be converted into stock at the bondholder's option, providing the potential for higher returns if the stock price increases. They may also offer lower interest rates than non-convertible bonds because of this potential for additional returns. Additionally, some convertible bonds may have call provisions that allow the issuing company to retire the bonds before maturity, which could be disadvantageous for bondholders, but this is not a universal feature of convertible bonds. Therefore, options A, B, and D are not necessarily true for all convertible bonds.

Convertible Bonds Are Attractive to Bondholders Because