If-converted method - Definition

A method used to assess the dilution of convertible securities if converted into new shares when the stock price is above the Exercise price. This method assumes convertible securities are converted either at the issuance date or the beginning of the year. The number of new shares is calculated based on the conversion ratio of the convertible security. Though converting such a security into new shares will inherently dilute the share price, this effect can have tax advantages by also reducing interest expense.



Terms near "If-converted method"

Illegal dividend
Illiquid
Illiquid assets
ILS
Implied Volatility
In the Money
Index Funds
Indicative Quote
Industrial Production
Infection
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