Downside risk of convertible bonds, Financial Management

When the underlying stock becomes worthless, the percentage price declines the investors experience is given by,

Percentage of Downside Risk=    2188_downside risk of convertible bond.png

It is also called premium over intrinsic value. The higher the premium over the intrinsic value, all other factors remaining constant, the less attractive the convertible bond.

Posted Date: 9/10/2012 7:30:52 AM | Location : United States







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