A convertible bond:

A) Is a combination of a loan and a put option.
B) Normally has a perpetual conversion feature.
C) Has a value which is equal to its straight bond value plus it conversion value.
D) Has a minimum value which is equal to the greater of the two floor values.
E) Is worth an amount equal to the greater of the straight bond value or the conversion value plus the option to abandon value.

Convertible Bond

A convertible bond is a type of bond that can be converted into a predetermined number of the issuing company's shares at the discretion of the bondholder, typically at certain times during its life.

Conversion Value

In convertible securities, the value of the security if it were converted into a different form, such as from a bond to stock.

Straight Bond Value

The value of a bond that pays a fixed interest rate and does not have any embedded options or features.