What is a Conversion Parity Price?
A conversion parity price is the calculation of the eventual realized rate or price that is paid for any type of convertible security that is later converted into shares of common stock. The conversion parity price is not considered to be the same as the actual purchase price for the security. Sometimes referred to as a market conversion price, the conversion parity price seeks to determine how equal the price between the security and that value of the stocks acquired by the conversion process actually turns out to be. Calculating the conversion parity price involves two key pieces of information. It is necessary to know the conversion ratio set for the security at the time of purchase. In addition, the actual purchase price paid for the security must be available. Determining the conversion party price involves dividing the purchase price of the security by the conversion ratio. If the purpose of calculating the conversion parity price is to determine the realized price involved when
” A conversion parity price is the calculation of the eventual realized rate or price that is paid for any type of convertible security that is later converted into shares of common stock. The conversion parity price is not considered to be the same as the actual purchase price for the security. Sometimes referred to as a market conversion price, the conversion parity price seeks to determine how equal the price between the security and that value of the stocks acquired by the conversion process actually turns out to be. . Calculating the conversion parity price involves two key pieces of information. It is necessary to know the conversion ratio set for the security at the time of purchase.
