Debt instruments that include an option to convert them to equity under specified conditions are known as:
A) preference shares
B) convertible notes
C) options
D) rights

Question

Quizplus · Accepted Answer

Convertible notes are debt instruments that have an option to convert them to equity under specified conditions, such as the occurrence of a particular event or at the holder's discretion. Preference shares, options, and rights do not necessarily include a conversion option.

Debt Instruments That Include an Option to Convert Them to Equity