Conversion premium and Cost saving centre: Difference between pages

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imported>Doug Williamson
m (Added more space so that calculations are clearer)
 
imported>Doug Williamson
(Expand wording for clarity.)
 
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The premium over an ordinary share's current market price at which the holder of the convertible security may convert it into ordinary shares.
Treasury cost saving centres are a more risk-tolerant variant on a pure cost centre.  


A cost saving centre is a treasury which still acts primarily as a service function, but which is allowed a degree of discretion about when to hedge, with a view to reducing net costs.


For example:


the current market price of the ordinary shares is £2,
==See also==
*[[Cost centre]]


the conversion price is £2.50. 
[[Category:The_business_context]]
 
 
The conversion premium
 
= [£2.50 - £2.00 = £0.50]/£2.00
 
= 25%.
 
 
== See also ==
* [[Conversion price]]
* [[Convertible bonds]]

Revision as of 16:41, 10 February 2015

Treasury cost saving centres are a more risk-tolerant variant on a pure cost centre.

A cost saving centre is a treasury which still acts primarily as a service function, but which is allowed a degree of discretion about when to hedge, with a view to reducing net costs.


See also