What is one potential impact of converting convertible bonds into stock for existing shareholders?

Converting convertible bonds into stock can lead to an increase in the number of outstanding shares. When bondholders exercise their right to convert their bonds into shares of the company's stock, new shares are issued. This action dilutes the ownership percentage of existing shareholders because the total number of shares now in circulation has increased.

As convertible bonds are transformed into equity, the total capitalization of the company may not change significantly right away, but the change in the share count impacts existing shareholders by reducing their relative ownership stake in the company. This increased number of outstanding shares can also affect metrics like earnings per share (EPS) and may influence the stock's market price.

While it might also impact dividends and voting power, the most direct and immediate effect is the increase in the number of outstanding shares, leading to dilution for existing shareholders.