Break even calculations Break even(years) conversion premium /(convertible yield - stock yield =2121/(7.00-1.67)=3.98( years) Number of years necessary for the stock investor to recover the conversion premium from the convertibles higher income relative to an instrument of an equivalent amount in the stock After 3.98 years, the convertible has made up, in income alone, the amount of the conversion premium6 Break even calculations Break even (years) = conversion premium / (convertible yield – stock yield) = 21.21 / (7.00 – 1.67) = 3.98 (years) Number of years necessary for the stock investor to recover the conversion premium from the convertible’s higher income relative to an instrument of an equivalent amount in the stock.  After 3.98 years, the convertible has made up, in income alone, the amount of the conversion premium