Contingent Convertible Bonds (CoCos) Are NOT Similar to Ordinary Convertible

question 48

Multiple Choice

Contingent Convertible bonds (CoCos) are NOT similar to ordinary convertible bonds because:

• A) CoCos are convertible to the firm's preferred stock while the ordinary convertible bonds are convertible to the firm's common stock.
• B) CoCos offer a higher coupon than ordinary convertible bonds.
• C) Cocos are convertible into stock only if the firm's stock price hits a certain level.
• D) Ordinary convertible bonds are converted to the firm's stock if the firm's stock falls below a certain level.

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Definitions:

NumberFormatException

An exception thrown in Java when an attempt is made to convert a string into a numeric format, but the string does not have the appropriate format.