Conversion Price

外汇网2021-06-19 13:33:36 84

The price per share at which a convertible security, such as corporate bonds or pferred shares, can be converted into common stock.

Taobiz explains Conversion Price

The conversion price is determined when the convertible security is issued and can be found in the bond indenture (in the case of convertible bonds) or in the security prospectus (in the case of convertible pferred shares). The conversion price is essential in determining the number of shares to be received, by computing the quotient of the principal value of the convertible security pided by the conversion price. Usually, the conversion price is set at a significant amount higher than the current price of the common stock, so as to make conversion desirable only if a company's common shares experience a significant increase in value.

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