Conversion Ratio


DEFINITION of 'Conversion Ratio'

The number of common shares received at the time of conversion for each convertible security . It is calculated by using this formula:


Conversion Ratio

BREAKING DOWN 'Conversion Ratio'

The higher the ratio, the higher the number of common shares exchanged per convertible security . The conversion ratio is determined at the time the convertible security is issued and will have an impact on the relative price of the security.

  1. Par Value

    The face value of a bond. Par value for a share refers to the ...
  2. Market Conversion Price

    An investor's effective cost to purchase common stock when it ...
  3. Conversion

    The exchange of a convertible type of asset into another type ...
  4. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  5. Conversion Price

    The price per share at which a convertible security, such as ...
  6. Contingent Convertibles - CoCos

    A security similar to a traditional convertible bond in that ...
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