Conversion premium

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Revision as of 15:09, 20 September 2014 by imported>Doug Williamson (Added more space so that calculations are clearer)
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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.


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

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