Introduction to Convertibility

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This tutorial explains how some investments can be converted from one type of security into another.

What you will learn

  • What Are Convertible Securities?
  • Why Do Corporations Issue Convertible Securities?
  • Why Do Investors Buy Convertible Securities?
  • What Do Investors Get on Conversion of Convertible Securities?

What do you know?

Introduction to Convertibility

Do you want to have the benefits of two investments in one security? You can with convertible securities. The privilege of converting one security to another offers the benefits of both types of securities. Both corporations and investors benefit from convertible securities.

A convertible security is a stock or bond that may be converted into another type of security under a particular set of conditions. It offers the investor a blend of benefits and serves a specific investment need.