The value of these debentures closely follows that of the common stock. Should the value of the common stock rise well above the conversion price, the investor will share in this rise. On the other hand, should the value of the common fall, the investor is protected by the straight debt or fundamental investment value of the debenture, which limits the downside risk." The second group, including Phillips Petroleum 4¼'s, 1987, was, according to Eastman, Dillon analysts, "designed to meet the requirements of the investor who wishes to place primary emphasis on the yield of the debentures. Here, because the current market price of the common is far removed from the conversion price, the debentures are selling on their merits as bonds. At the same time, the conversion feature remains a potential added attraction.

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