Callable Preferred Stock

Finance allah shmoop what is forced conversion Okay this is

forced conversion Yeah this is also forced conversion and so's

this Yeah that is the issuer of this particular bond

Like the company who borrowed money has the right as

described in the indenture to force you to convert the

bond either into and say twenty five shares of common

stock or something else Which sort of implies that a

stock price the over under price of breaking evens about

forty bucks a share takes you get that thousand dollars

divided by the twenty five shares Think it's you forty

bucks a share or the issuer or company who sold

the bond in the first place can simply call the

bond and force converted into cash for the small conversion

premium of ah two point five percent or that's twenty

five bucks in this thousand dollars par value bond So

in this sense essentially the break even Numbers actually 41

dollars a share not forty there because you get an

extra little premium bump there if they force you to

convert the bond or debt into equity Got it We'll

force conversion in a bond sense is usually something cos

do when they can either refinance the bond at cheaper

interest rates or are doing so well operationally that they

have enough cash Teo just retire their debt They call

it back They buy it back save the interest charges

and quick cash toe work doing something else Either way

it's usually weigh less painful than the other flavour of 00:01:30.926 --> [endTime] forced conversion