Question

when a firm find it difficult to service it existing debt it may decide to convert them into equity is called as ​

Answer 1

A convertible debenture is a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period. Convertible debentures are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.

These long-term debt securities pay interest returns to the bondholder like any other bond. The unique feature of convertible debentures is that they are exchangeable for stock at specified times. This feature gives the bondholder some security that may offset some of the risks involved with investing in unsecured

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