medium · Investment Banking implied-share-price
Which of the following describes the 'If-Converted' method for convertible bonds in the context of fully diluted shares?
- It assumes the bond is converted into equity at the beginning of the period if it is in-the-money.
- It requires the company to pay the principal in cash and only issues shares for the interest savings.
- It treats the bond as debt if the share price is above the conversion price to be conservative.
- It calculates the number of shares by dividing the market cap by the bond's coupon rate.
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