If a company issues debt that is convertible at the corporation's option,in substance,the debt is:
A) Debt
B) Equity
C) An Asset
D) Subordinated

Question

Quizplus · Accepted Answer

The fact that the debt is convertible at the corporation's option means that the debt holder may choose to convert their debt into equity at a predetermined rate. Therefore, the debt has an implied equity component, making it in substance, equity.

If a Company Issues Debt That Is Convertible at the Corporation's