conversion premium

Quick Reference

The cost of converting a share at the current market price into a convertible security or warrant. It is normally expressed as a percentage of the market price of the convertible security, by means of the formula:

(Ps−Pc) × 100 ≥0

where Ps is the market price of shares, Pc is the price at which the convertible may be exchanged for shares, and P mc is the market price for the convertible.

Subjects: Financial Institutions and Services.

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