Conversion premium: Difference between revisions
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imported>Doug Williamson (Standardise appearance of page.) |
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The conversion premium is given by: | The conversion premium is given by: | ||
= ( | = (2.50 - 2.00) / 2.00 | ||
= 0.50 / 2.00 | |||
= 25%. | = 25%. | ||
Revision as of 20:37, 15 January 2016
The premium over an ordinary share's current market price at which the holder of the convertible security may convert it into ordinary shares.
Example
The current market price of ordinary shares is £2.
The conversion price is £2.50.
The conversion premium is given by:
= (2.50 - 2.00) / 2.00
= 0.50 / 2.00
= 25%.
