The premium payback period is the time required for the enhanced income from the bond to offset the premium over conversion value.

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The premium payback period refers to the time it takes for the additional income (usually in the form of higher interest payments) generated by a bond purchased at a premium (above its conversion value or par value) to compensate for the extra cost paid over its conversion value. This concept is particularly relevant in the context of convertible bonds or bonds purchased above their face value.

The Premium Payback Period Is the Time Required for the Enhanced