Firms generally do not call their convertibles unless the conversion value is greater than the call price.

Name: Firms generally do not call their convertibles unless the conversion value is greater than the call price.
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

Firms typically call their convertible securities when the market price (conversion value) of the shares into which the bonds can be converted exceeds the call price, as this incentivizes bondholders to convert their bonds into equity, reducing the firm's debt obligations.

Firms Generally Do Not Call Their Convertibles Unless the Conversion