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4 Cards in this Set
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- Back
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Parity value
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When you have a bond or preferred stock which is convertible, there is a prie level at which the convertible and the common are worth the same dollar valu
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Equation for # of shares produced
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Par value*/conversions price= common shares produced
*use 'par' value of 100 for convertible stock and $1,000 for convertible bond |
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Equation for Parity price of common stock
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Mkt price/ common shares produced=Parity price of c/s
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Equation for conversion price
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par value/common shares produced=conversion price
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