Set the face value to 100, the conversion price to 5, the stock price to 6, the bond price to 110 and the floor to 95, and the Convertible Bond Calculator answers four questions at once: you receive 20 shares, those shares are worth 120.00, the conversion premium reads -8.33% in green, and the floor premium reads 15.79% in orange. The first two numbers describe the stock side; the two percentages describe how far the bond trades from each side. Everything runs in the browser; nothing is uploaded.
Four Outputs, Two Sides
A convertible bond pays a bond question and a stock question at the same time. The share count and the conversion value answer the stock side: what you would hold if you converted. The conversion premium answers how expensive the bond is relative to that stock value, and the floor premium answers how expensive it is relative to the straight bond underneath. Read the two premiums with the same sign logic: a positive premium means you pay extra, a negative one means you get a discount. In the default example the conversion premium is negative and the floor premium is positive, which is the normal shape of a tradeable convertible.
Shares: Face Value Divided by Conversion Price
Every convertible carries a conversion price: the currency units one share costs when you convert. Divide the face value by that price and the share count falls out: 100 / 5 = 20. The calculator shows the whole number first and the exact value beside it, so 20 (20.00) is the honest reading. Change the conversion price to 6 and the same bond returns 16.67 shares: the integer display hides two-thirds of a share, which matters at real conversion where the broker settles the fraction in cash. The conversion price is set at issuance and never moves; it is the strike of the embedded call.
Conversion Value: Shares Times Stock Price
Multiply the shares by the current stock price and the conversion value appears: 20 times 6 is 120.00. Three anchor points frame the number. At the conversion price itself the value equals the face value: 20 times 5 is 100, so a stock at 5 is the break-even where converting neither helps nor hurts. At 5.5 the value is 110, exactly the bond price, and the premium crosses zero. At 7.5 it is 150, at 10 it is 200. If you convert and sell the shares into the market, the Stock Profit Calculator turns that 120.00 of stock into a gain or loss against what you paid for the bond.
The Conversion Premium: Discount or Price of Optionality
The premium subtracts the conversion value from the bond price and divides by the value: (110 - 120) / 120 = -8.33%. Negative means the bond trades below the stock it converts into, so converting and selling immediately beats holding the paper: the market is telling you the bond is cheap. Positive means the opposite, and the size is the price of the floor plus the option: a bond at 130 over a value of 100 carries a +30% premium, a bond at 110 over 100 carries +10%. Whether that price is fair is a return question; the ROI Calculator puts the premium next to the coupon and the time left to maturity so you can compare it with a plain investment.
The Floor: Downside and What the Bond Is Worth Without the Stock
Strip the conversion right away and what remains is a plain bond: coupons plus redemption, discounted, which is the floor, 95 in the default. The floor premium measures the gap from that anchor: (110 - 95) / 95 = +15.79%, the amount paid above the straight bond for the embedded option. If the floor were 80 and the bond 100, the floor premium would read +25%. The floor is also the crash anchor: as the stock falls, the conversion value slides toward zero, but the bond price slides toward the floor, not the value. Judging how far that slide can go is a fundamentals question about the stock; the P/E P/B Valuation tool rates the underlying share on price versus earnings and book value, and the market cap guide sizes the company so you know what 20 shares actually represent.
Convert Now or Hold
The decision has two clocks. Short term, compare conversion value and bond price every session: while 120 exceeds 110, conversion is the richer side, and the moment the premium flips positive the bond earns its keep as protection. Long term, the embedded call is a real option with the conversion price as its strike; the article on calculating a Black-Scholes option price prices exactly that shape of payoff. If you hold, the growth question dominates: at 10% a year the stock doubles in roughly seven years by the rule of 72, the rule of 72 guide works the shortcut, and the CAGR guide compounds the path from 6 to the level where conversion stops being a question.