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GHI plc issues 500,000 of convertible loan stock. Holders will have the option to convert each 5.00 of stock into 4 ordinary shares in 6

GHI plc issues 500,000 of convertible loan stock. Holders will have the option to convert each 5.00 of stock into 4 ordinary shares in 6 months time. The current share price is 86p, and the loan stock is trading at par.

Calculate the conversion premium.

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