Accounting Dictionary

Convertible Bond

A convertible bond is a bond that converts into a preset number of shares of common stock.

Let’s say you bought a convertible bond for $100. At the time the common stock was selling for $20. Your convertible bond might come with an option to convert into four shares of common stock. You wouldn’t covert because 4 shares of common stock are only worth $80 (4 shares x $20). When you first buy a convertible bond the conversion feature is never a good deal. Let’s say the common stock raises to $35 a share. Now you might want to convert because 4 x $35 is $140 and you would have made a nice profit.

Sign Up to Learn More!

Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!

Scroll to Top
Get Your eBook Today!

Fill out this form to have our eBook sent directly to your email address.

Access Until You Pass

The Elite-Unlimited course provides UNLIMITED continuing access to your course materials until you pass the CPA Exam! How does it work? Upon activating your course, you will have an initial 36 months of access. You can then renew your subscription as many times as you need to pass your exams—for FREE. Simply click the “renew” option in your student account and you can continue studying your high-quality course materials without losing any of your data and course progress.

Renewal Instructions

  •   Please purchase a renewal using the "Renew" option from the My Account page
  •   To qualify for renewal pricing, course must be renewed before it expires
  •   All renewals are effective from the current expiration date and cannot be deferred
  •   Test information cannot be reset (deleted) with renewal unless eligibility criteria is met (see Help page)