Definition of Conversion value:
The term conversion value refers to the financial worth of the securities obtained by exchanging a convertible security for its underlying assets. Convertibles are a category of financial instruments, such as convertible bonds and preferred shares, which can be exchanged for an underlying asset, such as common stock.
Market or realizable value of an asset, instrument, or security.
Conversion value is calculated by multiplying the common stock price by the conversion ratio.
How to use Conversion value in a sentence?
- Conversion value calculations are useful in determining break-even or floor values involved with holding convertible securities.
- Conversion value is the amount an investor would received if a convertible security is changed into common stock.
- This value is arrived at by multiplying the conversion ratio (how many shares received per bond) by the market price of the common stock.
Meaning of Conversion value & Conversion value Definition