What is a Conversion Price?
Conversion prices have to do with the structure of the pricing related to various types of convertible securities. The convertible security in question may be preferred shares of stock or bonds issued by a given company. As part of the conversion price approach, these types of securities may be converted into common stock when a specified set of circumstances takes place. As part of the overall purchase structure for the security, the conversion price is set at the time of issue. The exact details of the conversion price will appear in one of two different documents, depending on the type of security involved. With preferred share of stock, the information will be found in the body of the security prospectus. If the security in question is a convertible bond issue, the details will be included in the bond indenture. In most countries, there are no provisions for adding a conversion price clause to shares of stock or bond issues after the fact. Within the overall structure of the initia
