Which of the following is not a characteristic of convertible bond issues?
A) The average size of the offering is small.
B) A 15-20% conversion premium at the time of issue is common.
C) Large companies with billions of dollars in sales and assets are the primary issuers.
D) Primary issuers tend to have less than AAA bond credit ratings.

Question

Quizplus · Accepted Answer

This statement is incorrect as both large and small companies can issue convertible bonds. However, the other statements are correct. The average size of the offering is small, a conversion premium is typically included, and primary issuers often have credit ratings less than AAA.

Which of the Following Is Not a Characteristic of Convertible