CONVERSION PREMIUM

The additional amount an investor in a CONVERTIBLE BOND pays above CONVERSION PARITY to acquire the bond, generally expressed as a percentage of parity: where PCB is the price of the convertible bond and Convpty is conversion parity. See also ADJUSTED BREAKEVEN, CONVERSION PRICE, CONVERSION RATIO, CONVERSION VALUE, EQUIVALENT BREAKEVEN, INVESTMENT PREMIUM, SIMPLE BREAKEVEN.

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