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hi folks and welcome to the short lecture on convertible debt where debt is converted at the investors option um first of all just a few words about what convertible debt is first of all it allows investors to convert part of their debt into equity and um so in other words what will happen is that you might buy a bond uh and as an investor and that bond offers you the privilege of converting at your option any part of that bond into common shares so its usually the case that investors will pay a premium because they have the option to stay with the debt and get the steady stream interest payment and or at their option they can convert into into shares but uh first of all just a few notes when when conversion is at the investors option the market price of the shares needs to exceed the conversion price in order to motivate them to convert obviously otherwise why would they convert so just to give you an example of what we mean here say for example an investor has a thousand dollar bon