A more thorough explanation:

Bond Conversion

Bond conversion is the process of exchanging a convertible bond for another asset, usually stock.

Example 1: Company A issues a convertible bond to investors. The bond can be converted into shares of Company A's stock at a predetermined price. If the investor decides to convert the bond, they will receive the shares of stock instead of the bond.

Example 2: An investor holds a convertible bond from Company B. The investor decides to convert the bond into shares of Company B's stock because they believe the stock will increase in value.

Bond conversion is a way for investors to potentially benefit from a company's stock price increase. By converting a convertible bond into stock, investors can participate in the company's growth and potentially earn a higher return on their investment. The examples illustrate how bond conversion works in practice, showing how investors can exchange their bonds for stock in the issuing company.