Question

Convertible bonds are usually converted into:

-other bonds at a lower interest rate.
-common stock.
-stock warrants.
-preferred stock.

Answer 1

Convertible bonds are usually converted into common stock when the bondholder exercises the conversion option.

Step-by-step explanation:

Convertible bonds are usually converted into common stock when the bondholder chooses to exercise the conversion option. Convertible bonds give the bondholder the right to convert the bond into a specified number of shares of common stock at a predetermined conversion price. This allows the bondholder to participate in the potential upside of the company's stock.