Conversion ratio# of shares that can be exchanged for one convertible bond
| Par value of bond/ conversion price
| Conversion pricePrice per share that determine the number of share you will received
| Par value of bond/conversion ratio
| Conversion value – an indication of what a convertible issue would trade for if it were priced to sell on the basis of its stock value.
| Conversion ratio x market price of stock
| Conversion premium ( in $)It is difference between the market price of the convertible bond and the higher of its security value and its conversion value * Use it if market price of convertible bond is given
| Market price of convertible bond – conversion value
| Conversion premium (in $) - Use it if market price of convertible bond is not given
| Par value – conversion value
| Conversion premium (in $)- Use it if market price of convertible bond is not given
| Conversion price – market price of stock
| Conversion premium (%)
| Conversion premium (in RM)/conversion value
| Conversion premium (in %)
| Conversion price – market price of common stock/market price of common stock
| Value of straight bond ( security value)It Is the value of the convertible without conversion feature. Thus, calculated as straight bond.
| CP(PVIFA %,n) + Par value (PVIF,% n)
| Payback period
| Conversion premium/(annual interest payment from the convertible bond – annual dividend income from the underlying common stock)
| Conversion parityThe price at which the common stock would have to sell in oder to make convertibke security worth its present market price. Aka conversion equivalent.
| Market price of convertible bond/conversion ratio
Please join StudyMode to read the full document