Ask Question
10 March, 12:38

What is the difference between a callable bond and a convertible bond?

+2
Answers (2)
  1. 10 March, 14:26
    0
    A callable bond is a bond that can be called back in by the issuer prior to maturity. For example, a 10 year bond issued today could be called back in 8 years.

    A convertible bond is a bond that converts into the equity of the underlying company. For example, the bond of XYZ company can be converted into the stock of XYZ company under certain conditions.

    A convertible bond has the advantage in that there is upside when the owner converts into stock.
  2. 10 March, 16:35
    0
    Explanation:Convertible bonds. Are corporate bonds that can be converted by the holder into the common stock of the issuing company.

    Callable bonds. Called provision option held by the company to repurchase the bond at specific price. Is also called redeemable bonds, jump up etc. While most callable bonds are coupon bonds.

    There are no big differences between the two, convertible bonds are often callable, eg corporate bonds can be convertible/callable or the both.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “What is the difference between a callable bond and a convertible bond? ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers