# Corporate Finance 16 Convertible Bonds Warrants

Learn about convertible bonds, warrants, and derivative securities from a certified public accountant (CPA)

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## Corporate Finance 16 Convertible Bonds Warrants

### What you’ll learn

List common convertible securities
Explain what convertible securities are
Explain what warrants and how that can be used
Describe derivative securities
Calculate warrant intrinsic value
Calculate convertible bond conversion value
Calculate convertible bond pure bond value

### Requirements

Basic understanding of corporate finance concepts

### Description

This course will cover convertible securities. We will discuss convertible bonds, warrants, & derivative securities.We will include many example problems, both in the format of presentations and Excel worksheet problems. The Excel worksheet presentations will include a downloadable Excel workbook with at least two tabs, one with the answer, the second with a preformatted worksheet that can be completed in a step-by-step process along with the instructional videos.Convertible securities are securities that can be converted from one asset type into another asset type. Convertible bonds are one of the most common types of convertible securities. Convertible bonds have the option, but not the obligation, for a bondholder to convert the bond to some number of stocks.The conversion feature in convertible securities makes them more difficult to value then other securities. For example, we can attempt to value a convertible bond by calculating the value of the related stock it could be converted into or by valuing bonds of a similar class which do not have a conversion option.Warrants are an option to buy a set number of shares of common stock at a specified price over a given time.Derivative securities are financial instruments whose value depends upon the value of another asset. Common examples of derivative securities are futures, forwards, options, and swaps.

### Overview

Section 1: Introduction

Lecture 1 1905 Convertible Securities

Lecture 2 1910 Warrants

Lecture 3 1915 Derivative Securities

Section 2: Practice Probs. – Convertible Bonds & Warrants

Lecture 4 OneNote Resource

Lecture 5 1911 Warrants Intrinsic Value & Speculation Premium

Lecture 6 1913 Warrants Break Even Price

Lecture 7 1916 Convertible Bond Conversion Value & Conversion Premium

Lecture 8 1917 Convertible Bond Price & Conversion Value

Lecture 9 1919 Convertible Bond on Exchange

Lecture 10 1920 Convertible Bond Pure Bond Value vs Market Price Prob. 1

Lecture 11 1921 Convertible Bond Pure Bond Value vs Market Price Prob. 2

Lecture 12 1922 Convertible Bond Change in Price & Conversion Premium

Lecture 13 1923 Convertible Bond Crossover Point – Conversion Value Equals Pure Bond Value

Lecture 14 1924 Convertible Bonds & Call Feature

Lecture 15 1925 Convertible Bond Sale, Gain, & Rate of Return

Lecture 16 1926 Warrant vs Stock Price % Increase

Lecture 17 1927 Warrant Exercise & Rate of Return Calculations

Lecture 18 1928 Exercise Warrant Gain vs Common Stock Gain

Lecture 19 1929 Warrant Gain vs Stock Gain – Same Investment Amount

Lecture 20 1930 Convertible Bonds & Diluted Earnings Per Share

Lecture 21 1931 Convertible Bonds – Pure Bond value Impact vs Conversion Value Impact on Pr

Lecture 22 1933 Convertible Bonds Pure Bond Value & Falling Stock Price

Section 3: Excel Probs. – Convertible Bonds & Warrants

Lecture 23 1911 Warrants Intrinsic Value & Speculation Premium

Lecture 24 1913 Warrants Break Even Price

Lecture 25 1916 Convertible Bond Conversion Value & Conversion Premium

Lecture 26 1917 Convertible Bond Price & Conversion Value

Lecture 27 1919 Convertible Bond on Exchange

Lecture 28 1920 Convertible Bond Pure Bond Value vs Market Price Prob 1

Lecture 29 1921 Convertible Bond Pure Bond Value vs Market Price Prob 2

Lecture 30 1922 Convertible Bond Change in Price & Conversion Premium

Lecture 31 1923 Convertible Bond Crossover Point – Conversion Value Equals Pure Bond Value

Lecture 32 1924 Convertible Bonds & Call Feature

Lecture 33 1925 Convertible Bond Sale, Gain, & Rate of Return

Lecture 34 1926 Warrant vs Stock Price % Increase

Lecture 35 1927 Warrant Exercise & Rate of Return Calculations

Lecture 36 1928 Exercise Warrant Gain vs Common Stock Gain

Lecture 37 1929 Warrant Gain vs Stock Gain – Same Investment Amount

Lecture 38 1930 Convertible Bonds & Diluted Earnings Per Share

Lecture 39 1931 Convertible Bonds Pure Bond Value Impact vs Conversion Value Impact on Pric

Lecture 40 1933 Convertible Bonds Pure Bond Value & Falling Stock Price