Conversion Ratio

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What is the Conversion Ratio?

The Conversion Ratio is an investing term that reflects the number of shares of common stock that a security holder will receive from exercising the call option of a convertible bond or a convertible preferred stock. It is the number of shares of common stock that could be obtained by converting each share of a convertible security.

The ratio can be calculated by the following formula:

Conversion Ratio = (Par Value of Convertible Security)  /  (Conversion Price of the Common Security)

Forum Start a new topic about the Conversion Ratio Write here. Ask a question or explain something. Forum about the Conversion Ratio. 🔥 Setting the Optimal Conversion Ratio: Market Conditions In convertible securities, the conversion ratio is more than just a mathematical outcome of par value and conversion price — it is a strategic lever that responds to the wider market climate apart fro... 3

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Compare with: Convertible Preferred Stock  |  Convertible Bond  |  Conversion Price

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