Conversion premium

Conversion premium
The percentage by which the conversion price in a convertible security exceeds the prevailing common stock price at the time the convertible security is issued. ...

Conversion premium:
The amount, expressed as a dollar value or as a percentage, by which the price of the convertible security exceeds the current market value of the common stock into which it may be converted.
Critical Mass: ...

Conversion Premium
Refers to the percentage above parity at which the convertible security is trading. Conversion Premium is calculated as follows: (Convertible Price - Conversion Value) divided by Conversion Value
Conversion Ratio ...

conversion premium
A convertible's conversion premium is the amount by which a convertible's market price exceeds its value in stock. The premium may be expressed as the dollar difference or as a percentage.
conversion ratio ...

The conversion price is normally fixed at a premium (the conversion premium) to the market price of the shares. The conversion value is how much the convertible bond is worth in terms of the shares it will be converted into.

It is here that the conversion premium is highest. The conversion premium is also influenced to some extent by transaction costs, insurance company investment restrictions, the duration of the conversion option, and the size of common dividends.

There is a debt conversion premium that is difficult to understand. In my opinion management has not done a particularly good job of explaining these issues in clear terms.

Conversion parity price Related:Market conversion price Conversion premium The percentage by which the conversion price in a convertible security exceeds the prevailing common stock price at the time the convertible security is issued.

conversion premium The dollar or percentage amount by which the price of the convertible security... conversion price The price at which a given convertible security can be converted to common stock....

See also: Convertible security, Conversion price, Futures price, Expected return, Market portfolio