Use the conversion equivalent or conversion parity price


A convertible bond has a conversion ratio of 30 and presently trades at 105 even (the price quote from your brokerage). If the current market price of the underlying common stock is $31.25 per share, use the conversion equivalent (or conversion parity price per share) to find the conversion premium:

Parity price/share: _ _

Conversion premium: _ _%

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Financial Management: Use the conversion equivalent or conversion parity price
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