ADJUSTED BREAKEVEN
\ɐd͡ʒˈʌstɪd bɹˈe͡ɪkɛvən], \ɐdʒˈʌstɪd bɹˈeɪkɛvən], \ɐ_dʒ_ˈʌ_s_t_ɪ_d b_ɹ_ˈeɪ_k_ɛ_v_ə_n]\
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A measure of the number of years it takes for an investor to recover the initial CONVERSION PREMIUM paid when purchasing a CONVERTIBLE BOND, after accounting for the fact that the investor may purchase more COMMON STOCK than represented by the CONVERSION RATIO. Adjusted breakeven is typically computed as: where Convprem is the conversion premium, C is the COUPON, PCB is the price of the convertible bond, S is the price of the common stock, and DPS is DIVIDENDS per share. See also EQUIVALENT BREAKEVEN, SIMPLE BREAKEVEN.ADJUSTMENTBONDABOND issued as a RECAPITALIZATION instrument by a company in FINANCIAL DISTRESS, often as an INCOMEBOND that only pays investors COUPON interest as earnings permit.
By Henry Campbell Black
Word of the day
Collagen Induced Arthritis
- ARTHRITIS that is induced in experimental animals. Immunological and infectious agents can be used to develop models. These methods include injections of stimulators the immune response, such as an adjuvant (ADJUVANTS, IMMUNOLOGIC) or COLLAGEN.