Market conversion price

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 ?
We are pleased to complete this convertible debt funding, with an above market conversion price, to help bring on additional production capacity in Europe for the exciting opportunities in both our clinical trials and our Hospital Exemption program," commented Linda Powers, CEO of NW Bio.
99 or the market conversion price, defined as 90% of the average of the lowest three daily volume weighted average trading prices per share of Cobalis' common stock for the fifteen trading days immediately preceding the conversion date.