Conversion premium: Difference between revisions
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imported>Doug Williamson m (Added more space so that calculations are clearer) |
imported>Doug Williamson (Align presentation of formula with qualification material) |
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| Line 2: | Line 2: | ||
For example: | '''For example:''' | ||
the current market price of the ordinary shares is £2, | the current market price of the ordinary shares is £2, | ||
| Line 11: | Line 11: | ||
The conversion premium | The conversion premium | ||
= | = ( £2.50 - £2.00 = £0.50)/ £2.00 | ||
= 25%. | = 25%. | ||
Revision as of 15:27, 14 March 2015
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%.
