Q341
Bonds that can be exchanged with other stock issued by same firm are classified as
A.
discount convertible bonds
B.
convertible bonds
AnswerC.
non-convertible bonds
D.
premium convertible bonds
Answer: Option B
Solution
Answer: Option B
Solution:
Bonds that can be exchanged with other stock issued by same firm are classified as convertible bonds. A convertible bond is a fixed-income debt security that yields interest payments, but can be converted into a predetermined number of common stock or equity shares. The conversion from the bond to stock can be done at certain times during the bond's life and is usually at the discretion of the bondholder.