Employee Layoffs – Handle Carefully
The term employee layoff is referred to as temporary separation of an employee from the employer. However, these days it is also used for permanent termination of an employee for business reasons. According to section 2 of the Industrial Disputes Act, 1947, the employee layoff is the failure, inability or refusal of an employer to […]
Reasons for Failure of Virtual Teams
Last year Bob Stuart was given the ‘Best Team Leader’ award because his team had delivered all the milestones accurately and on-time. Along with the award, he was also a given a greater responsibility of leading a bigger and more diverse team whose members were located in 3 different countries. But this year not only […]
Benefits of Participative Management
Participative management as a decision making style is not welcome by one and all! Labor or trade unions, for example do not approve of this. They argue that it is in fact disadvantageous to welfare of the workers because the participative processes give deep insights to the management, which in turn puts the latter in […]
Role of Personal Development in Career Growth
Who do you think is a valuable employee? An individual becomes a burden on his/her organization when he fails to perform additional tasks beyond his/her regular key responsibility areas. Multitalented employees definitely have an edge over those who restrict themselves only to a particular task and fail to contribute in other departments and areas. Organizations […]
Non Verbal Communication – Actions Speak Louder than Words
Scenario 1 – You are sitting in front of an interview panel with arms crossed. So far you have not been asked a single question, however, your crossed arms have spoken louder than the words. Tip 1 – Never keep your arms crossed especially during formal one-on-one meetings. It suggests you are not open to […]
The fixed-income security market is mostly composed of financial instruments which offer a fixed stream of income to investors.
In other words, this means that the possible downside that investors may face is protected while at the same time investors can have only a limited upside. This is exactly opposed to stocks wherein the possible downside which is unlimited whereas the upside could also be unlimited. Convertible debt is a complex financial product that tries to provide investors with the best of both worlds. This means that convertible debts are a financial product that offers investors limited downside and an unlimited upside opportunity at the same time.
In this article, we will have a closer look at how convertible bonds work. The details have been mentioned in the article below.
Convertible bonds are financial instruments that start off as bonds in the initial years of the investment. However, with the passage of time, investors are given the option to convert their bonds to equity shares from time to time. The ratio at which this conversion will happen is already predetermined and mentioned in the covenants of the bond. The details of the working of convertible debt have been explained below.
Convertible debt is a complex financial instrument. Hence, in order to make an informed financial decision, investors need to be more financially aware of certain terms. The terms which are most commonly used in the indenture of a convertible debt have been mentioned below:
The fact of the matter is that convertible debt is an extremely versatile form of financial instrument which are used by investors and corporations worldwide. However, they are more complex than regular bonds. Hence, unless an investor has the specific know-how as to how to evaluate such bonds, they should be exercise caution while investing in them.
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