A convertible security in which the holder must pay a certain amount of money in addition to the exchange of the convertible in order to receive common stock in the underlying company. Because of this provision, plus-cash convertibles are susceptible to large price fluctuations.
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An unusual type of convertible security that requires a fixed cash payment in addition to surrender of the convertible in order to exercise the conversion privilege and obtain the shares of common stock. A plus-cash convertible has built-in leverage that produces relatively large price swings in the convertible compared with the underlying common stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.