Which of the following statements about convertible bonds is (are) true?
A) A convertible bond cannot have call feature.
B) A callable bond cannot have a convertible feature.
C) A convertible bond can also have call feature.
D) all of the above statements about convertible bonds are false

Question

Quizplus · Accepted Answer

A convertible bond can have both a convertible feature and a call feature. This allows the issuer to call the bond if the stock price rises significantly, thus eliminating the need to make interest payments to bondholders who have converted to equity. Option A is false because convertible bonds can have a call feature. Option B is false because callable bonds can have a convertible feature. Option D is incorrect because option C is true.

Which of the Following Statements About Convertible Bonds Is (Are)