What is the value of the transfer?
Conversion value is the price at which convertible security is converted into ordinary shares. There are two main types of securities that companies use to increase capital: bonds and stocks. Bonds offer investors with fixed income throughout the lifetime of the bond, while shares offer investors the opportunity to share business profits through appreciation of shares and dividends prices. Both securities have advantages and disadvantages. As a result, bankers and companies issue hybrid securities with the characteristics of both. One type of hybrid security allows investors to transfer from the company's ownership companies to the ownership of the company's shares. These types of securities are referred to as securities convertible. When the company converts bonds to stocks, this selling price is the value of the conversion that is determined when the security is originally issued.
Investors of Risk-Vozy such as the ability to invest in a company through a debt that has a smaller riziko than shares. Premium or market price is preferred for convertible or convertible bonds. Investors can participate in the assessment of shares prices without the risk of losing the amount invested in certainty.
Many companies issue preferred shares and ordinary shares. Both represent a form of ownership, but only ordinary shareholders can vote. In addition, ordinary shareholders benefit from the price of shares prices, while preferred shareholders generally have a fixed payment every six months, such as a bond. As such, the Prospectus reports will have a certain price for which the preferential shares are eligible to convert into ordinary shares. The same director applies to convertible bonds.
know what conversion value means is one thing. But understanding where to find it and how to use it is another. Investors can find the Vindenture Bond conversion value for conversionTibil bonds or in a prospectus for convertible preferred stocks. Practically, the value of conversion will tell the investor or financial advisor how many shares will be received after transformation. In addition, it may be necessary to calculate the conversion value from the conversion ratio.
As an example if investors own preferred stocks that are $ 100 prices (USD) and the prospectus says the conversion ratio is five, that is, an investor can trade with one preferred share for five ordinary shares. The division of the current price of preferred shares according to the ratio of conversion gives the price for which the ordinary shares must be sold to make the investor profit from the conversion. For example, $ 100/5 = $ 20.00. This is known as the value of conversion on the market because it is unlikely that the investor trades at a cost lower than this to make profits.