• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Why do convertibles...

S

sonarhorin

Member
Hello there
Why do Convertibles in gereral provide higher income than Ordinary share even though it gives the opportunity to convert into shares?

Anyone please help!
Thanks!
 
Convertibles generally (ie not always) provide higher income than ordinary shares.

You might consider this as follows.

Convertibles should appeal to similar types of investors that want to buy shares, as the convertible "turns into" a share in the end. If the share offered higher income than the convertible in the short term, then investors might just buy the share now, and not bother with the convertible at all, as the long run position would be the same, but the investor would benefit from higher income in the short term. So the higher income on convertibles could be to make them more appealing.
 
You must log in or register to reply here.
Back
Top