What economic conditions would prompt investors to take advantage of a
QUESTION
What economic conditions would prompt investors to take advantage of a bonds convertibility feature?
tlook of the economy like high growth rate, better employment, national income, infrastructure development, etc. 2) Fall in the interest rates. 3) Positive changes in the companys management. 4) New projects coming up for the company. 5) Overall, the company is expected to grow and be more profitable. As the additional profits go to the shareholders because the payments to the creditors and bondholders are fixed, the direct impact of increase in the profitability is rise in share prices.
ANSWER:
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