A convertible bond is a type of bond that include the option for the bondholder to convert the bond into the share of issuing company’s common stock. Convertible bonds offer investors the potential for income and equity with in a single investment. There are types of convertible bond available, and investors should consider the pros and cons of each before deciding to invest. While convertible bonds offer reduced the downside risk, they also come with lower yield and the risk of dilution if the bonds are converted in common shares. Overall convertible bond can be useful investment tool for those seeking income and equity participation.