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, that can be exchanged for an underlying asset, such as common stock. Conversion value is calculated by multiplying the common stock price by the conversion ratio.
A convertible security that is trading at a price above its conversion value is said to have a conversion premium. This makes the security valuable and desirable. A convertible security is considered "busted" when it is trading at a price far below its conversion value. If the price of the underlying security falls too far below the conversion value, the convertible security is said to have reached its floor.
Investment dictionary. Academic. 2012.
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conversion value — For convertibles, the value in stock. Also called the parity value. The conversion value can be determined by multiplying the conversion ratio by the value of the stock at any point in time. American Banker Glossary The value of a convertible… … Financial and business terms
Conversion value — Also called parity value, the value of a convertible security if it is converted immediately. The New York Times Financial Glossary … Financial and business terms
conversion value — /kən vɜ:ʃ(ə)n ˌvælju:/ noun a value of convertible stock, including the extra value of the ordinary shares into which they may be converted … Dictionary of banking and finance
conversion value — Fin the value a security would have if converted into shares … The ultimate business dictionary
conversion value — rate of exchange of foreign currencies … English contemporary dictionary
Value conversion — is the act of converting one type of value or financial instrument into another type of negotiable value. In the securities profession the definition of conversion value is very narrowly defined as the positive difference between the market price … Wikipedia
conversion ratio — Fin an expression of the quantity of one security that can be obtained for another, for example, shares for a convertible bond EXAMPLE The conversion ratio may be established when the convertible is issued. If that is the case, the ratio will… … The ultimate business dictionary
Conversion premium or discount — A ratio, expressed as a percentage, of a convertible bond s market value to its conversion value (i.e. its value if converted into equity). A premium occurs when the conversion value of the security is lower than the market value. A discount… … International financial encyclopaedia
Value network — A value network is a business analysis perspective that describes social and technical resources within and between businesses. The nodes in a value network represent people (or roles). The nodes are connected by interactions that represent… … Wikipedia
conversion price — Fin the price per share at which the holder of convertible bonds, or debentures, or preferred stock, can convert them into ordinary shares. EXAMPLE Depending on specific terms, the conversion price may be set when the convertible asset is issued … The ultimate business dictionary