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what’s the relevance of conversion price when all that matters is market conversion price…
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If the price of the convertible bond rises as much of the percentage price rise in underlying shares when the share price rises above (market)conversion price, what is the incentive to ever convert, cause u get to enjoy coupons as well as price rise?
- the convertible bond is converted to shares maybe because holder believes dividends of share are higher than (fixed) coupons of convertible bond.