Conversion ratio
Also written ratio.
Common shares received per preferred share. Fixed on an optional convertible; on a mandatory it moves between a minimum and a maximum with the stock.
Definition
The number of common shares one preferred share converts into. For an optional convertible preferred it is fixed by the terms and sets the conversion price, the liquidation value divided by the ratio. For a mandatory convertible it moves between a minimum and a maximum with the stock's price over the conversion band. Ratios change with anti-dilution adjustments such as splits; the record shows the terms with their as-of date.
Definitions describe how YieldDesk reads the term. Nothing on this page is investment advice or a recommendation to buy, sell or hold.