Yenra original fictional debenture exercise — September 6, 2026
Teaching assumptions only: not an offering, legal template or investment recommendation. You may reuse this original example for personal or commercial purposes.

Principal $1,000; five-year maturity; fixed 5% coupon paid annually at year-end; senior unsecured; no issuer call. Holder may convert after a scheduled coupon is paid into 40 newly issued shares. Conversion extinguishes principal and future coupons. If not converted, principal is due at maturity. Assume no default and ignore tax, fees, price spreads and restrictions. Real documents are more complex.

Without conversion: five $50 coupons plus $1,000 principal = $1,250 undiscounted cash. Principal is returned capital. At a $950 purchase price, current yield = 50/950 = 5.2631579%, not yield to maturity.
Conversion price equivalent: 1000/40 = $25. At share prices $20 and $30, 40 shares are worth $800 and $1,200 respectively, excluding the coupon just paid. Compare against actual debt value and terms, not automatically par.
Dilution: 1,000 identical notes create 40,000 shares. Existing 1,000,000 shares become 1,040,000. An unchanged holding of 10,000 shares moves from 1% to 0.96153846%. This does not predict share price or economic value after debt is extinguished.