When the interest rate decreases the value of the bond will increase. Assume the current interest rate and coupon rates are 8%. When the interest rates falls to 7%, investors find the bond attractive as it has more yield. When the stock price increases, the value of bond will increase. For instance, if a bond value worth $1,000 can be converted to five shares and if the value of five shares increases to $1,500, the price of the bond will also increase.