common stock equivalent

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Common stock equivalent

A convertible security that is traded like an equity issue because the optioned common stock is trading above the conversion price.

Common Stock Equivalent

A convertible security that is traded as if it was a common stock. The common stock equivalent is traded like common stock because it can be exchanged for actual common stock on demand from the holder.

common stock equivalent

A security viewed as basically the same as common stock, generally because the equivalent security may be exchanged for shares of common stock. Common stock equivalents include convertible bonds, convertible preferred stock, options, and warrants. Common stock equivalents are used in calculating earnings per share even though the calculation overstates the actual number of shares outstanding.
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