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    Characteristics of convertible bonds

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    Which of the following statements about convertible bonds is not correct?

    a. New funds are raised by the firm when convertibles are sold
    b. The coupon rate on convertibles is usually lower than on straight bonds
    c. Convertible bonds are generally considered by investors to be less risky than straight bonds
    d. When issued, a convertible bond's conversion price is usually set lower than the current stock price
    e. In fact, all of the answers are correct

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    d. When issued, a convertible bond's conversion price is usually set lower than the current ...

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    The solution helps explain the correct alternative in relation to characteristics of convertible bonds

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