conversion ratio
(redirected from Conversion rate)Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.
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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.