Final answer:
Convertible bonds are retired when bondholders choose to convert them into shares of stock.
Step-by-step explanation:
Convertible bonds are retired when bondholders choose to convert them into shares of stock. When a company issues convertible bonds, it gives bondholders the option to exchange their bonds for a predetermined number of company shares. This provides bondholders with the opportunity to benefit from any future increase in the company's stock price.