Which of the following statements regarding convertible bonds is NOT true?
A) If there is no advantage to converting the bonds into common stock, they would sell at a price based on their market value without the convertible feature.
B) Coupon rates are usually higher than nonconvertible bond rates of the same issuer.
C) Convertible bondholders are creditors of the corporation.
D) Coupon rates are usually lower than nonconvertible bond rates of the same issuer.
Answer: B) Coupon rates are usually higher than nonconvertible bond rates of the same issuer.