Convertible bonds tend to pay less interest than comparable non‑convertible bonds.

Name: Convertible bonds tend to pay less interest than comparable non‑convertible bonds.
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Question

Convertible bonds tend to pay less interest than comparable non‑convertible bonds.​

Quizplus · Accepted Answer

Convertible bonds offer the option to convert into stock, which gives investors the potential for greater returns through stock appreciation. This makes them more attractive than non-convertible bonds, which don't offer this option, so they can afford to offer lower interest rates.

Convertible Bonds Tend to Pay Less Interest Than Comparable Non‑convertible