What is the convertible bond conversion premium


Question: A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1120 despite the fact that the bond's coupon rate and the market rate are equal. The common stock obtained upon conversion is selling for $54 per share. What is the convertible bond's conversion premium?

Solution Preview :

Prepared by a verified Expert
Finance Basics: What is the convertible bond conversion premium
Reference No:- TGS01825370

Now Priced at $25 (50% Discount)

Recommended (98%)

Rated (4.3/5)