COST OF REDEEMABLE DEBT

Hie John,

so to calculate the cost of redeemable debt , we always calculate IRR isnt it?what is more interesting is when the holders of bonds are keen to convert.Is it correct that if the conversion value of the bond is greater than it`s nominal value , we use this conversion to calculate the cost of debt instead of the nominal value. For example , the market value of 8% convertible bond is $82 per $100 nominal.given than the bond can be converted into 25 shares of $3.50 each currently and this shre price is expected to grow at 3% pa, the conversion value is $101.44[CV=Po(1+g)nR] note that n is a power.So in year five, instead of suing the traditional $100 nominal at redemption, we simply use $101.44 conversion value to calculate the internal rate of return which is the cost of redeemable debt?May you please correct me if i confused this principle.