Conversion premium

In a bullish environment, the enthusiasm of the market boosts conversion premium levels.

• National Semiconductor Corporation (Sept 1995) – coupon rate 6.5 percent and conversion premium of 45 percent.
• 3Com Corporation (Nov., 1994) – coupon rate 10.25 percent and conversion premium of 70 percent. Bondholders are compensated with a high coupon rate while they wait for the stock price to rise.

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