A corporate bond that can be turned into shares
A convertible bond carries the right to swap it for shares at a set price. If the share price rises you convert and take the gain; if it does not, you keep receiving interest and the face value. In exchange, the interest rate is lower than on a plain corporate bond. Conversion creates new shares, which dilutes earnings per share for existing holders.
With a conversion price of $1,000, converting becomes worthwhile once the share price passes $1,200.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.