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.
Black’s Law Online Dictionary
