Which of the following statements is true regarding a corporate bond?
A) A corporate callable bond gives the holder the right to exchange it for a specified number of the company's common shares.
B) A corporate debenture is a secured bond.
C) A corporate indenture is a secured bond.
D) A corporate convertible bond gives the holder the right to exchange the bond for a specified number of the company's common shares.
E) Holders of corporate bonds have voting rights in the company.

Question

Quizplus · Accepted Answer

A corporate convertible bond allows the holder to convert the bond into a predetermined number of the company's common shares, making option D correct. Options A, B, C, and E are incorrect because a callable bond allows the issuer to redeem the bond before its maturity, a debenture is an unsecured bond, an indenture is a formal debt agreement, and bondholders generally do not have voting rights in the company.

Which of the Following Statements Is True Regarding a Corporate