B. Convertible Bonds (continued)

• 6. Conversion Ratio

  • Number of common shares which the Bond may be converted into
  • Example: A Ratio of 20 states that a $1000 Bond may be converted into 20 shares of the Common
    • Implied conversion price is $50/Share
    • Ratios are normally fixed but can be variable
    • Ratios are adjusted for stock splits

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