Which of the following is correct regarding the impact of convertible bonds on a comp

any’s financial statements and ratios:

A.The issuance of convertible bonds by a company results in a decrease in both its debt-to-equity and its interest coverage ratios.

B.The conversion of convertible bonds into common equity results in an increase in the company’s debt-to-equity ratio and an increase in the interest coverage ratio.

C.When there is a conversion of convertible debt into common equity, even if the market price exceeds the conversion price, no gain or loss may be reported on the financial statements.