FUND CORP FINANCE LL+MYFINLAB >IP<
FUND CORP FINANCE LL+MYFINLAB >IP<
2nd Edition
ISBN: 9781269932110
Author: Berk
Publisher: PEARSON C
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Chapter 15, Problem 14P
Summary Introduction

Convertible bonds: Those bonds which can be converted into proportionate number of common stock are called convertible bonds. These bonds get converted into equity. The provision under convertible bonds gives the issuers of bonds authority to convert bonds in the form of equity shares.

Conversion provision: The provision in which in which bondholder is allowed to convert bonds into the equity shares is called conversion provision. The bonds are converted into equity shares on the basis of conversion ratio. The conversion ratio is the number of shares that will be received after the conversion of convertible bonds.

Conversion ratio: The conversion ratio is the number of shares that will be received after the conversion of convertible bonds. It is calculated diving face value of bond by conversion price of bond.

To Determine: The price of share in order gets converted.

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Bond Valuation - A Quick Review; Author: Pat Obi;https://www.youtube.com/watch?v=xDWTPmqcWW4;License: Standard Youtube License