Market conversion price

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Market conversion price

Also called conversion parity price, the price that an investor effectively pays for common stock by purchasing a convertible security and then exercising the conversion option. This price is equal to the market price of the convertible security divided by the conversion ratio.

Market Conversion Price

The price one effectively pays for common stock when one exercises the conversion option of a convertible security. One calculates the market conversion price by dividing the price one paid for the convertible security by the conversion ratio, which is the number of shares of common stock one receives by exercising the conversion option. In order for the exercise of the option to be worthwhile, the market conversion price must be lower than the market price of common stock. It is also called the conversion parity price and the conversion value.
References in periodicals archive ?
Pentru conversion values gp formed in currencies other than the lion, use the leu / Currency communicated by BNR for.
MotiveShop enables retailers to maximise ecommerce revenues by being able to present visually dynamic, content-rich product information to customers, whilst also extending sales reach and increasing conversion values.
At a glance details make it a snap to locate hundreds of equations, conversion values and tables to speed problem solving.
In this manner, the market continually prices convertible securities, based on their conversion values plus the incremental value of their fixed-income components.
The condition to convertibility ceased because the average of the trading prices of the debentures for the ten consecutive trading day period ending July 27, 2006 was greater than 105% of the average of the conversion values of the debentures during that same period, as calculated under the indenture relating to the debentures.