What is CONVERSION PARITY?

The market value of the shares of COMMON STOCK into which a CONVERTIBLE BOND can be exchanged, generally computed as: where Convratio is the CONVERSION RATIO and S is the stock price. Also know as CONVERSION VALUE, PARITY. See also CONVERSION PREMIUM, CONVERSION PRICE, INVESTMENT VALUE.

More On This Topic



Link to This Definition
Did you find this definition of CONVERSION PARITY helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary