Bonds that may be exchanged for a specified number of shares of capital stock are called:
A)Junk bonds.
B)Convertible bonds.
C)Debenture bonds.
D)Mortgage bonds.

Question

Quizplus · Accepted Answer

Convertible bonds are debt securities that can be converted into a specified number of common stock shares at the bondholder's discretion. This feature provides an investor with the option of converting their bond investments into equity investments if the company's stock price increases, offering potential upside beyond interest income.

Bonds That May Be Exchanged for a Specified Number of Shares