Convertible securities are a type of security that can be converted into another type of security, usually common stock, at a predetermined price. They are often issued by companies as a way to raise capital without having to issue more shares of stock.
Convertible securities are a type of security that can be converted into another type of security, usually common stock. They are typically issued by companies as a way to raise capital without having to issue additional shares of common stock. Convertible securities are usually issued in the form of bonds, preferred stock, or warrants.
Bonds are a type of debt instrument that pays a fixed rate of interest over a specified period of time. They are usually issued with a maturity date, at which point the principal amount of the bond must be repaid. Convertible bonds can be converted into common stock at a predetermined price.
Preferred stock is a type of equity security that pays a fixed dividend and has priority over common stock in the event of a liquidation. Convertible preferred stock can be converted into common stock at a predetermined price.
Warrants are a type of security that gives the holder the right to purchase a certain number of shares of common stock at a predetermined price. Convertible warrants can be converted into common stock at a predetermined price.
Convertible securities are attractive to investors because they offer the potential for higher returns than traditional debt or equity securities. They also provide companies with a way to raise capital without having to issue additional shares of common stock. However, convertible securities are also riskier than traditional debt or equity securities, as they are subject to the volatility of the stock market.