Conversion premium: Difference between revisions

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Revision as of 14:19, 23 October 2012

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, say the current market price of the ordinary shares is £2, and the conversion price is £2.50. The conversion premium = [£2.50 - £2.00 = £0.50]/£2.00 = 25%.

See also