conversion premium

A convertible's conversion premium is the amount by which a convertible's market price exceeds its value in stock. The premium may be expressed as the dollar difference or as a percentage. American Banker Glossary
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The extent by which the conversion price of a convertible security exceeds the prevailing common stock price at the time the convertible security is issued. In general usage, the conversion premium is the amount by which the convertible security trades above its converted value. For example, if a $1,000 par bond is trading at $1,100, it is convertible into 50 shares, and the shares are trading at $21, the converted value is 50 X 20.50 = $1,025, and the conversion premium is $75. Bloomberg Financial Dictionary
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The amount by which the price of a convertible bond exceeds the market price of the underlying stock. Exchange Handbook Glossary

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conversion premium conversion premium premium1

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conversion premium UK US noun [C]
FINANCE, STOCK MARKET the amount by which the value of a preferred share, debenture, or bond is greater than the current value of an ordinary share for which it could be exchanged: »

The market conversion premium per share is usually expressed as a percentage of the current market price.


Financial and business terms. 2012.

Look at other dictionaries:

  • Conversion Premium — The amount by which the price of a convertible security exceeds the current market value of the common stock into which it may be converted. Most convertible securities trade at a price above its conversion value …   Investment dictionary

  • Conversion premium or discount —   A ratio, expressed as a percentage, of a convertible bond s market value to its conversion value (i.e. its value if converted into equity). A premium occurs when the conversion value of the security is lower than the market value. A discount… …   International financial encyclopaedia

  • premium — consideration paid for an insurance policy. Glossary of Business Terms (1) The additional payment allowed by exchange regulation for delivery of higher than required standards or grades of a commodity against a futures contract. (2) In speaking… …   Financial and business terms

  • Premium — (1) Amount paid for a bond above the par value. (2) The price of an option contract; also, in futures trading, the amount the futures price exceeds the price of the spot commodity. Related: inverted market premium payback period. Also called… …   Financial and business terms

  • conversion discount — /kən vɜ:ʃ(ə)n ˌdɪskaυnt/, conversion premium /kən vɜ:ʃ(ə)n ˌpri:miəm/ noun the difference between the price of convertible stock and the ordinary shares into which they are to be converted (NOTE: If the convertible stock is cheaper, the… …   Dictionary of banking and finance

  • Conversion Value — The financial worth of the securities obtained by exchanging a convertible security for its underlying assets. Convertibles are a category of financial instruments, such as convertible bonds and preferred shares, that can be exchanged for an… …   Investment dictionary

  • Conversion parity price — Related:Market conversion price Conversion premium The percentage by which the conversion price in a convertible security exceeds the prevailing common stock price at the time the convertible security is issued. The New York Times Financial… …   Financial and business terms

  • Premium —   Refer instead to Conversion premium or discount …   International financial encyclopaedia

  • Conversion Privilege — An insurance policy in which the insurer is required to renew or update the policy regardless of the insured s health. An insurance policy with this type of provision allows the insured to switch to a different type of policy without submitting… …   Investment dictionary

  • Condominium conversion — In real estate, a condominium conversion or condo conversion is the process of entitling an income property or other lands currently held under one title to convert from sole ownership of the entire property (which often already is a multi unit… …   Wikipedia

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