You are a debt investor and have purchased a bond (held to maturity, BDT 3,000,000, semi- annual 5 years bond with a coupon rate 11%) on the bond issuing date, i.e., January 5, 2019. Note that, the interest rate has been dropped to 9% and deposit interest rate to 6% from April 1, 2020. COVID 19 hit Bangladesh from March 8, 2020 and the situation is likely to be tougher in the future. Bangladesh Bank and Government have modified some policies to boost up the business and economy.

You have the flexibility to convert the bond into 200,000 common shares at a PAR BDT 10/share. Tax rate is 35%. Considering the ongoing issue and the upcoming economic/pandemic factor, explain your best investment strategy as a held to maturity bond holder. Should you hold the bond till the end of the maturity or convert them into common shares in 2020 or sell the bond and invest your money into other sector (you need to mention the name of the sector) to ensure maximum return in the future? Properly explain with relevant data/calculation about your investment strategy during .  Some information about the bond issuing company (Pre COVID 19):

Number of Common Shares= 10,500,000 Shares

Par Values = BDT 10/share

IPO value = BDT 12/share

Fair value of share (pre COVID 19) = BDT 16/share

Total Asset = BDT 60 cr (40% is current and the rest is noncurrent; 25% of current asset is

cash)

Total Liability = BDT 40 cr (70% is current and 30% is long term)

Total equity = BDT 20 cr (Equity has only three items: Paid up capital, Additional paid up

capital and Retained earnings)