In general, the market value of a convertible security is likely to be greater than its straight value or conversion value.

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This is because a convertible security offers the holder the flexibility to convert it into common stock if the stock's price increases. As a result, investors are willing to pay a premium for the additional optionality inherent in a convertible security, which increases its market value above its straight value or conversion value.

In General, the Market Value of a Convertible Security Is