STEP 0: Pre-Calculation Summary
Formula Used
Conversion Premium = Conversion Value-Market Price of Convertible Bond
CP = CV-MPCB
This formula uses 3 Variables
Variables Used
Conversion Premium - Conversion Premium is an amount by which the price of a convertible security exceeds the current market value of the common stock into which it may be converted.
Conversion Value - Conversion Value is the amount an investor would receive if a convertible security were changed into common stock.
Market Price of Convertible Bond - Market Price of Convertible Bond is how much someone will pay for the bond on the free market.
STEP 1: Convert Input(s) to Base Unit
Conversion Value: 100 --> No Conversion Required
Market Price of Convertible Bond: 95 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
CP = CV-MPCB --> 100-95
Evaluating ... ...
CP = 5
STEP 3: Convert Result to Output's Unit
5 --> No Conversion Required
(Calculation completed in 00.004 seconds)
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## Credits

Created by Keerthika Bathula
Keerthika Bathula has created this Calculator and 100+ more calculators!
Verified by Vishnu K
BMS College of Engineering (BMSCE), Bangalore
Vishnu K has verified this Calculator and 200+ more calculators!

## <Fixed Income Securities Calculators

​ Go Conversion Premium = Conversion Value-Market Price of Convertible Bond
Conversion Ratio
​ Go Conversion Ratio = Par Value at Maturity/Conversion Price of Equity
Conversion Value
​ Go Conversion Value = Market Price per Share*Conversion Ratio
Floating Interest Rate
​ Go Floating Interest Rate = Reference Rate+Fixed Spread

Conversion Premium = Conversion Value-Market Price of Convertible Bond
CP = CV-MPCB

Conversion premium is essential for investors looking to maximize returns with convertible bonds. The conversion premium represents the additional cost an investor pays for the potential upside of converting the bond into equity. By understanding how to calculate this premium, investors can make informed decisions about the attractiveness of a convertible bond.
The conversion premium is calculated by subtracting the current market price of the convertible bond from the conversion value per bond. The conversion value per bond is determined by multiplying the conversion ratio by the current market price of the underlying equity.

## How to Calculate Conversion Premium?

Conversion Premium calculator uses Conversion Premium = Conversion Value-Market Price of Convertible Bond to calculate the Conversion Premium, The Conversion Premium is the premium the bondholder will have over the conversion value. Conversion Premium is denoted by CP symbol.

How to calculate Conversion Premium using this online calculator? To use this online calculator for Conversion Premium, enter Conversion Value (CV) & Market Price of Convertible Bond (MPCB) and hit the calculate button. Here is how the Conversion Premium calculation can be explained with given input values -> 5 = 100-95.