Which of the following statements is true? A convertible bond is issued by government agencies rather than a firm with stock. To secure the conversion option on a bond, bondholders would pay a reduced (i.e. discounted) bond price. Convertible bonds can be converted into shares of common stock at some predetermined ratio at the discretion of the bondholder. Typically, the conversion ratio is set so that the firm's stock price must appreciate at least 40 percent before it is profitable to convert bonds into stock