If the convertible bonds are in-the-money, meaning that the stock price is higher than the conversion price, then the bonds will convert into equity. This means more shares will be created, which will dilute the share price since the same enterprise value has to be spread over a larger share count. ...

Assets = Liabilities + Shareholder’s Equity Above is the balance sheet equation, which is saying that all assets must be funded by either liabilities (e.g. debt) or shareholder’s equity (e.g. money from private or public investors). If the equation does not balance, that means there is an error ...