Replace Number Fields in the Convertible Debenture

Aug 6th, 2022
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How to Replace Number Fields in the Convertible Debenture

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this is a lecture from open tuition to benefit from the lecture you should download the free lecture notes from open tuition com so lets go through and carry on with this monstrous chapter on financial instruments by looking at convertible debentures so we know what a debenture is its a way of a business being able to raise finance so when we issue debentures we debit the bank and we credit a financial liability and then that financial liability is then treated at amortized cost okay thats what weve looked at so far isnt it however were now gonna look at a convertible debentures and a convertible debentures is another form of finance so were raising money but the way in which we incentivize the investors is by allowing them the option to go through there and instead of receiving cash on redemption they can go through there and receive shares within the business instead so its like a little bit of a reward yeah you can take cash if you want but there might be better terms within

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A convertible security is a securityusually a bond or a preferred stockthat can be converted into a different securitytypically shares of the companys common stock.
A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares. The conversion from the bond to stock happens at specific times during the bonds life and is usually at the discretion of the bondholder.
Convertible bonds are corporate bonds that can be exchanged for common stock in the issuing company. Companies issue convertible bonds to lower the coupon rate on debt and to delay dilution.
Answer and Explanation: The given statement is true. A convertible bond is a type of bond that can be converted into a specific number of shares of common stock.
In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value.
Typically, a convertible security is a bond that can be exchanged or converted into a specific number of shares of the issuers common stock.
What Is Forced Conversion? Some convertible bonds are subject to forced conversion, meaning the issuing company can convert the bonds into shares and cease interest payments at its discretion. Forced conversion typically occurs when the share price of the underlying company is approaching the bonds conversion price.
TF: Callable bonds can be exchanged for a fixed number of shares of the issuing corporations common stock.

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