A $1000 par value convertible bond has a conversion price of $50. It is currently selling for

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A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1,120 despite the fact that the bonds coupon rate and the market rate are equal. The common stock obtained upon conversion is selling for $54 per share. What is the convertible bonds conversion premium?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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