Convertible Bond

Description of Convertible Bond. Explanation.

Definition Convertible Bond. Description.

A Convertible Bond is a bond that the bondholder may exchange at certain times during its life, usually at the discretion of the bondholder, for a predetermined amount of common stock.

These bonds provide the combined benefits of a regular cash flow from interest (coupons) plus the possibility of a future price appreciation.

Compare with: Convertible Preferred Stock  |  Conversion Price  |  Conversion Ratio  |  Unissued Stock  |  Treasury Stock

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End of description Convertible Bond. An explanation.