Convertible Bonds

From Financial Literacy Wiki

Jump to: navigation, search

Convertible Bonds allows the bondholder to convert the bond into common shares before the maturity date. The pre-specified number of shares exchangeable from the bond is known as the conversion ratio. The ratio of the par value to the conversion ration is called the conversion price. The conversion feature benefits the bondholders by allowing him to participate in capital gains if the share price rises above the conversion price.


Personal tools