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Conversion RatioKnowledge Center |
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What is the Conversion Ratio? Meaning.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)
Compare with: Convertible Preferred Stock | Convertible Bond | Conversion Price |
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