Conversion premium: Difference between revisions

From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson
(Align presentation of formula with qualification material)
imported>Doug Williamson
No edit summary
Line 11: Line 11:
The conversion premium  
The conversion premium  


= ( £2.50 - £2.00 = £0.50)/ £2.00  
= ( £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%.


See also