Practice mode Finance

How does the coupon rate of a convertible bond usually compare with that of a similar ordinary bond?

Correct answer D. Lower

Explanation

Investors accept a lower coupon on a convertible bond because the option to convert it into shares gives them potential gains if the share price rises.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.