Convertible bond: reverse split

Convertible bonds: revere split

		Before and after the reverse split
# of shares outstanding (ratio)		2 → 1 (one for two split)
Market price of the common stock		x 2 (double)
Total market value of the stock		No change
Conversion ratio of the convertible bond		x 0.5
Conversion value of the convertible bond = Stock price * Conversion ratio		No change
Market conversion price		No change

Conversion ratio = Par value / Conversion price

Conversion value = Price of the common stock * Conversion ratio
= Price of the common stock * (Par value / Conversion price)
= (x2) * (x0.5) = (No change)