Lets assume for simplicity that in a years time the stock price is .40...

#1 you bought you stock on open market at .34 and by the time it reaches .40 you make a capital gain of approx 16 %.

#2 you buy the convertible and when the stock reaches .40 you are sitting on a 12 % (dividend) which is taxed at a much higher rate

as the stock price goes above .40 and on would the gains in both scenarios not  be equal....and if so why wait. I dont believe either scenario is safer for your money and in the long run scenario 1 puts more money in your pocket....am i missing something here??