When debentures are redeemed by converting them into shares or new debentures, what determines the price at which the new shares or debentures are issued?

It can be at par, at a discount, or at a premium

When debentures are redeemed by converting them into shares or new debentures, the price at which the new shares or debentures are issued can vary and is not necessarily fixed at par value. The specific terms and conditions of the conversion are determined by the company and are typically outlined in the debenture agreement. The company may choose to issue the new shares or debentures at:
* Par value: This means that the new shares or debentures are issued at their nominal or face value.
* At a discount: The new shares or debentures are issued at a price lower than their nominal value.
* At a premium: The new shares or debentures are issued at a price higher than their nominal value.
The decision on whether to issue at par, at a discount, or at a premium is influenced by various factors, including the company's financial position, market conditions, and the terms specified in the debenture agreement. It provides flexibility to the company to structure the conversion in a way that is mutually beneficial for both the company and the debenture holders.