The benefits convertible bonds offer are:

I. The issue can pay a lower coupon.
II. The investor can potentially purchase shares at a lower-than-market price.
III. The issuer does not need to re-pay the debt if the bond is converted.

Correct Answer: I, II and III

However, in case of conversion, the existing shareholders will face dilution. In case the conversion is not achieved, the bondholder will have lost potential interest income due to lower coupon.