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The price that the convertible investor effectively pays for the right to convert to common stock is called the market conversion price, and is calculated as shown below. [5] The conversion ratio - the number of shares the investor receives when exchanging the bond for common stock - is specified in the bond's indenture. [6]
The issuance prospectus will state either a conversion ratio or a conversion price. The conversion ratio is the number of shares the investor receives when exchanging the bond for common stock. The conversion price is the price paid per share to acquire the shares when exchanging the bond for common stock. [6] Market conversion price: The price ...
This represents a 1/20th interest in the new 6.00% Series A Mandatory Convertible Preferred Stock at $50.00 per share. Earlier, the company planned to offer 90 million shares of common stock. The ...
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Externally managed real estate investment trust Anworth Mortgage Asset announced yesterday that it is increasing the conversion rate on its 6.25% Series B cumulative convertible preferred stock ...
A convertible bond can be valued as a combination of a straight bond and an option to purchase the company's stock. [1] A redeemable, or callable, preferred stock confers the issuer to repurchase the stock at a preset price after a specified date, converting it to treasury stock.
Preferred stocks have become a way for income investors to secure a less risky position in a company, collect a higher yield, and still trade the securities on a relatively liquid market. But in ...
Holders of participating preferred stock have the choice between two payoffs: a liquidation preference or an optional conversion. In a liquidation, they first get their money back at the original purchase price, the balance of any proceeds is then shared between common and participating preferred stock as though all convertible stock was converted.