convertible security's price by at least the same percentage. Thus, the market conversion price can be thought of as a "break-even point."

If the price of the stock decreases to the point that the straight bond value is much greater than the conversion value, the convertible will trade much like a straight bond. This is referred to as a bond equivalent or busted convertible.

Advantages to the investor

Convertible bonds generally provide a higher current yield than common stock due to their fixed income features and superior

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