Convertible bondsa. have priority over other indebtedness. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may be exchanged for equity securities.

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Business

Eva Roth

18 April, 05:22

Convertible bondsa. have priority over other indebtedness. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may be exchanged for equity securities.

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Jayleen Duffy · Answer 1

d. may be exchanged for equity securities.

Explanation:

Convertible bonds

It is a debt security, which is fixed and which yields the interest payments, but it can be converted to a predetermined number of the equity shares or common stock.

The bond to stock conversion can be done at a number of times during the life of the bond.

These bonds are mostly issued by the companies which have low credit ratings and have potential of higher growth.