Question

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.

Answer 1

Answer:

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 .