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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Conversion Ratio

Definition:

This one has nothing to do with how many heads the minister dips in the river.

The term refers to the number of shares a bond is "convertible into." If you have a convertible bond, this ratio tells you how many shares of common stock you will get if you decide to convert the bond into stocks. 

Example

Let's say a $1,000 bond converts into 100 shares. At ten bucks a share, the conversion is break-even-ish. If it's more than ten bucks a share, you're sitting pretty.