Conversion premium: Difference between revisions
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imported>Doug Williamson m (Added more space so that calculations are clearer) |
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The premium over an ordinary share's current market price at which the holder of the convertible security may convert it into ordinary shares. | The premium over an ordinary share's current market price at which the holder of the convertible security may convert it into ordinary shares. | ||
For example | |||
For example: | |||
the current market price of the ordinary shares is £2, | |||
the conversion price is £2.50. | |||
The conversion premium | |||
= [£2.50 - £2.00 = £0.50]/£2.00 | |||
= 25%. | |||
== See also == | == See also == | ||
* [[Conversion price]] | * [[Conversion price]] | ||
* [[Convertible bonds]] | * [[Convertible bonds]] | ||
Revision as of 15:09, 20 September 2014
The premium over an ordinary share's current market price at which the holder of the convertible security may convert it into ordinary shares.
For example:
the current market price of the ordinary shares is £2,
the conversion price is £2.50.
The conversion premium
= [£2.50 - £2.00 = £0.50]/£2.00
= 25%.
