Mandatory convertible
Also written mandatory.
A preferred that becomes the issuer's common stock on a set date, the share count set by the stock's price. Its price follows the stock, not rates.
Definition
A preferred stock that converts into the issuer's common shares on a set date whether or not the holder wishes it. Until then it pays its dividend like any preferred. On the date each share becomes a number of common shares set by the stock's average price over the days before: the maximum ratio below the threshold price, the minimum above the initial price, and par's worth of stock between them (the conversion band). Its price follows the stock, so the record shows the price against conversion value and a yield to conversion in place of par and yield to call, and the score describes the dividend alone. Worked in the Mandatory Conversion calculator.
Definitions describe how YieldDesk reads the term. Nothing on this page is investment advice or a recommendation to buy, sell or hold.