effective price paid for common stock when the stock is obtained by converting either convertible preferred stock or convertible bonds. The face value of a convertible security divided by the conversion ratio (rate)gives the price of the underlying common stock at which the security is convertible. For example, if a $1000 bond is convertible into 10 shares of stock, the conversion price is $100 ($1000/10). An investor would usually not convert the security into common stock unless the market price was greater than the conversion price.
dollar value at which convertible bonds, debentures, or preferred stock can be converted into common stock; announced when the convertible is issued.
the dollar value at which convertible bonds, debentures, or preferred stock can be converted into common stock, as announced when the convertible is issued.
