Week 7 Discussion 1

Week 7 Discussion 1 - inviting than it may be to the issued...

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A convertible bond is a bond that can be converted into common stock at the bondholder’s option. (Wiley, Kimmet, Keiso, 2010). If the value of the convertible bond drops below the face value of the bond, then there’s no loss for the bondholder if it’s converted to common stock. For the company issuing the bond, it seems much more
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Unformatted text preview: inviting than it may be to the issued because if the stock doesn’t thrive then you’re left with a bond with a less than desirable worth. However, this can fluctuate both ways, and the stock could do very well and you can make a sizeable profit from your convertible bonds....
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This note was uploaded on 08/22/2011 for the course ACC 557 taught by Professor Makkawi during the Spring '10 term at Strayer.

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