Conversion Ratio

What Does Conversion Ratio Mean?
The number of common shares received at the time of conversion for each convertible security. It is calculated by using this formula:

Investopedia explains 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.

Filed Under: Bonds, Fixed Income, Investor Relations

Related Terms

Contingent Convertibles - CoCos
Conversion
Conversion Price
Convertible Bond
Convertible Preferred Stock
Irredeemable Convertible Unsecured Loan Stock - ICULS
Mandatory Convertible
Par Value
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