Convertible bonds: draw the payoff diagram for the equity and convertible debt in the following simplified example for the mentioned future date, using firm value on the x-axis and the claim value of equity (a solid line) and the claim value of convertible bonds (a dashed line) on the y-axis. Assume the rule of absolute priority applies. Company X has 40 outstanding shares of equity and 20 outstanding convertible bonds that promise 10 each in a future date. Each of these bonds can be converted at the bondholder's discretion, into 4 new shares of stock on the same future date. Convertible bonds: draw the payoff diagram for the equity and convertible debt in the following simplified example for the mentioned future date, using firm value on the x-axis and the claim value of equity (a solid line) and the claim value of convertible bonds (a dashed line) on the y-axis. Assume the rule of absolute priority applies. Company X has 40 outstanding shares of equity and 20 outstanding convertible bonds that promise 10 each in a future date. Each of these bonds can be converted at the bondholder's discretion, into 4 new shares of stock on the same future date