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Topic 4 Capital Raising Debt and Equity Explain the optimal strategy investors anticipate from the convertible bond illustrated below. 2000 Convertible Bond (prior to maturity)

Topic 4 Capital Raising Debt and Equity

Explain the optimal strategy investors anticipate from the convertible bond illustrated below.

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2000 Convertible Bond (prior to maturity) 1500 Value ($) 1000 Straight Bond 500 Conversion Price = $66.67 15 Shares of Stock 30 50 70 90 110 130 Stock Price ($)

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