Convertible Bond

Business / Taxes / Convertible Bond: Convertible bonds are corporate bonds that give you the alternative of converting their value into common stock of that company or redeeming them for cash when they mature. The details governing the conversion, such as the number of shares of stock you would receive, are set when the bonds are issued. A convertible bond has a double appeal for investors: Its market value goes up if the stock price rises, but falls only to what it would be as a conventional bond if the stock prices falls. In other words, the upside potential is considered greater than the downside risk. While convertible bonds typically provide lower yields than conventional bonds from the same issuer, they may provide higher yields than the underlying stock. You can buy convertibles through a broker or choose a mutual fund that invests in them.

Other Words for Bond

Bond Verb Synonyms: cement, bind, hold together, stick, cohere
Bond Noun Synonyms: tie(s), shackles, chains, fetters, manacles, handcuffs, trammels, thongs, cord(s), rope(s), restraint(s), constraint(s), check(s), control(s), rein(s)
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Convertible Hedge

Business / Taxes / Convertible Hedge: When you use a convertible hedge, you buy a convertible bond, which you can exchange under certain circumstances for shares of the company’s common stock. At the same time, you sell short the common MORE

Convertible Preferred Stock

Business / Accounting / Convertible Preferred Stock: Preferred stock that can be converted to common stock at a specified conversion rate. MORE

Bond Value

Business / Finance / Bond Value: With respect to convertible bonds, the value the security would have if it were not convertible. That is the market value of the bond minus the value of the conversion option. MORE

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