Percentage premium

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Percentage premium

Applies mainly to convertible securities. Premium over parity of a convertible bond divided by parity.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Percentage Premium

The amount the price of a convertible bond exceeds its parity, expressed as a percentage. Convertible bonds may be traded like most bonds, and fluctuate in price like all securities. When its market value equals the value of the underlying common stock, the bond is said to have parity. When a convertible bond trades at a premium, this means that it is more expensive than the current value of the underlying. A convertible bond may trade at a premium if the issuer has a good credit rating and/or if investors believe that the price of the common stock will rise again.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
House prices near to Clitheroe Royal Grammar School, in the Ribble Valley, have the third highest percentage premiums, being PS6,857 or 62 per cent more expensive than those in Lancashire generally.
For second shifts, cents-per-hour differentials commonly averaged between 10 and 20 cents; percentage premiums, usually between 5 and 10 percent.
Figure 2 indicates the average percentage premium respondents said they would be willing to pay for a range of certified wood products.
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