Forcing or Stimulating o Investors can exercise their option to convert to common stock at any time o Companies can force conversion by calling the ssue. The company has an incentive to call only when the conversion price exceeds the call price by around 15% and when the common dividend rate is less than the interest or pfd. dividend rate investors are earning. o Firms attempt to stimulate conversion by including the Step-up?feature to the conversion 22-12 price or increasing the common dividend22-12 Forcing or Stimulating Conversion Investors can exercise their option to convert to common stock at any time. Companies can force conversion by calling the issue. The company has an incentive to call only when the conversion price exceeds the call price by around 15% and when the common dividend rate is less than the interest or pfd. dividend rate investors are earning. Firms attempt to stimulate conversion by including the Step-up?feature to the conversion price or increasing the common dividend