convertible bond - Investment & Finance Definition
A bond that the bondholder may exchange for a predetermined amount of common stock. For example, a company could issue $10,000 face-value convertible bonds that could be converted into 30 shares of the company’s common stock after three years. Convertible bonds are attractive because they provide regular cash flow, along with the possibility of future price appreciation.Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana. Used by arrangement with John Wiley & Sons, Inc.