Advanced English Dialogue for Business – Conversion feature

Listen to a Business English Dialogue About Conversion feature

Albert: Hey Paisley, have you heard about the conversion feature in investments?

Paisley: Yes, it’s a provision that allows investors to convert a security into another form, typically from debt to equity.

Albert: That’s correct. It can be beneficial for investors if the value of the equity increases over time.

Paisley: Are there any risks associated with the conversion feature?

Albert: One risk is that the conversion may dilute the ownership stake of existing shareholders if more shares are issued upon conversion.

Paisley: How does the conversion ratio work?

Albert: The conversion ratio determines how many shares of the new security the investor will receive for each share of the original security.

Paisley: Can you provide an example of how the conversion feature works?

Albert: Sure, let’s say you have a convertible bond that can be converted into 100 shares of stock. If the stock price rises, you might choose to convert the bond into shares to benefit from the increase.

Paisley: Are there any restrictions on when the conversion can occur?

Albert: Sometimes there are, such as waiting periods or specific conditions outlined in the investment agreement.

Paisley: What happens if the investor chooses not to convert?

Albert: If the investor decides not to convert, they can continue holding the original security until maturity or redemption.

Paisley: How does the conversion feature impact the value of the security?

Albert: The conversion feature can add value to the security, especially if there’s potential for the stock price to increase significantly.

Paisley: Thanks for explaining, Albert. The conversion feature seems like an interesting aspect of certain investments.