Fill in the Blank QuestionFill in the blank question.If a bondholder converts to common , the corporation no longer has to redeem the bond at the date.

The blank in the question can be filled with "maturity" or "redemption."

Explanation

When a bondholder decides to convert their bonds into common equity (or stock), the corporation effectively changes its obligation. Bonds typically have a maturity date, which is the date when the issuer is required to repay the bond’s principal to the bondholder. However, if the bondholder converts their bonds into common stock before this maturity or redemption date, the corporation is relieved of its obligation to pay back the principal amount of the bond. This conversion can be beneficial for both parties, as the bondholder may gain equity in the company, which has the potential for greater returns if the company performs well, while the company avoids the cash outflow required to redeem the bond at maturity.