conversion ratio

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Conversion ratio

Applies mainly to convertible securities. Relationship that determines how many shares of common stock will be received in exchange for each convertible bond or preferred stock when a conversion takes place. It is determined at the time of issue and is expressed either as a ratio or as a conversion price from which the ratio can be figured by dividing the par value of the convertible by the conversion price.

Conversion Ratio

The number of common shares obtainable for each convertible security should the investor exercise the convertible option. A higher ratio means that more common shares are available per convertible security. It is calculated using the following formula: Conversion Ratio = Face Value of Convertible Security / Conversion Price.

conversion ratio

The number of shares of stock into which a convertible security may be exchanged. The ratio for a convertible bond is calculated by dividing the principal amount of the bond by the conversion price.
References in periodicals archive ?
The process of converting grain, legumes, and their byproducts into human-edible meat is commonly expressed as a grain:meat conversion ratio.
Figures 3 and 4 showed that the conversion ratios of C=C and SH were close to 90.
Our results are similar to another Canadian study of a hemodialysis unit (n=95) that showed conversion ratios greater than 200:1, when patients were converted from subcutaneous epoetin alfa to intravenous darbepoetin alfa (Shalansky & Jastrzebski, 2005).