Asked by Michael Culham on Jul 01, 2024
Verified
If the bondholder has the right to exchange a bond for shares of common stock, the bond is called a convertible bond.
Convertible Bond
A convertible bond is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company, usually at certain times during its life.
Common Stock
A type of equity security that represents ownership in a corporation and entitles the holder to vote at shareholder meetings and receive dividends.
- Recognize the different types of bonds (convertible, callable) and their specific features.
Verified Answer
NC
nkongzembo carolyn6 days ago
Final Answer :
True
Explanation :
This statement is true. A convertible bond gives the bondholder the right to convert the bond into a predetermined number of shares of common stock at a certain price, which is known as the conversion price.
Learning Objectives
- Recognize the different types of bonds (convertible, callable) and their specific features.