Convertible Bond Conversion Price Calculator
Find a convertible bond’s conversion price, conversion value, and conversion premium from its par value, conversion ratio, and the stock price.
Result
- Conversion price (par ÷ ratio)$50.00
- Conversion value (ratio × stock)$800.00
- Conversion premium vs stock25.00%
- Bond premium over conversion value25.00%
- StatusOut of the money (behaves like a bond)
- Break-even stock price$50.00
Step-by-step
- Conversion price = par ÷ ratio = $1,000.00 ÷ 20 = $50.00.
- Conversion value = ratio × stock = 20 × $40.00 = $800.00.
- The stock is 25.0% below the conversion price — the bond trades on its debt value.
How to use this calculator
- Enter the bond’s par value and its conversion ratio (shares per bond).
- Enter the current stock price.
- Optionally enter the bond’s market price for the bond-premium figure.
- Read the conversion price, conversion value, and premium.
About this calculator
A convertible bond is a hybrid security: it pays interest like a normal bond but can be converted into a fixed number of the issuer’s shares. Two numbers define the equity side. The conversion ratio is how many shares you receive per bond, and the conversion price — par value divided by the ratio — is the effective price per share at which you would be swapping your bond for stock. This calculator derives the conversion price, the current conversion value (the ratio times the live stock price, i.e. what the shares would be worth if you converted now), and the conversion premium, which is how far the stock must rise to reach the conversion price. When the stock trades below the conversion price the bond behaves like debt (a "bond floor"); when it rises above, the convertible tracks the equity. Understanding these levels shows whether a convertible is trading on its bond value or its stock upside.
How it works — the formula
Conversion price = Par ÷ Conversion ratio
Conversion value = Conversion ratio × Stock price
Conversion premium = (Conversion price − Stock) ÷ StockPar over ratio sets the effective conversion share price; multiplying the ratio by the live stock gives current parity, and the premium is the gap to the conversion price.
Worked examples
- Inputs:
- par=1000, ratio=20, stock=40, bondPrice=1000
- Output:
- conv price $50, value $800, premium 25%
- Inputs:
- par=1000, ratio=25, stock=50, bondPrice=1250
- Output:
- conv price $40 — in the money
- Inputs:
- par=1000, ratio=10, stock=80, bondPrice=900
- Output:
- conv price $100, premium 25%
Limitations
- Ignores accrued interest, credit risk, and call features.
- Conversion premium is to the conversion price, not a market-adjusted figure.
- Does not value the embedded option (use a convertible pricing model for that).
Structural metrics; not a full valuation or investment advice.