The relationship between convertible securities and the dividend yield of the common stock of the same issuing corporation. The yield advantage is the additional amount of return an investor can expect to earn if a convertible security is purchased instead of the common stock.

The yield advantage is calculated by subtracting the dividend yield of common stock from the rate of return on a convertible security. Determining this calculation helps investors decide if it is advantageous to retain the convertible security or exchange it for common stock.

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You subtract the dividend yield from the rate of return on a convertible security.

The relationship between convertible securities and common stock is that they are both owned by an investor.

This calculation helps investors decide if it is advantageous to retain or exchange their convertible security for common stock.

Yield advantage means the additional amount of return an investor can expect to earn if a convertible security is purchased instead of the common stock.

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