The trend in stock prices subsequent to an issue influences whether or not a convertible issue will

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The trend in stock prices subsequent to an issue influences whether or not a convertible issue will be converted, but conversion itself typically does not provide a firm with additional funds. Indirectly, however, conversion may make it easier for a firm to get additional funds by lowering the debt ratio, thus making it easier for the firm to borrow. In the case of warrants, on the other hand, if the price of the stock goes up sufficiently, the warrants are likely to be exercised and thus to bring in additional funds directly.

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