When a bond matures, an investor will cash it in if the market price of the convertible bond is higher than the conversion price of the bond.

Question

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When a bond matures, the investor does not decide to cash it in based on the market price versus the conversion price. At maturity, the issuer repays the principal amount of the bond to the investor, regardless of the bond's market price or conversion terms. The decision to convert a convertible bond into stock (if it is a convertible bond) is typically made before maturity, based on the relative value of the conversion option versus the bond's value, not at maturity.

When a Bond Matures, an Investor Will Cash It in If