Definitions for "Common Stock Equivalent" Add To Word List
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Common stock fund Common stock market
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preferred stock or bond which is convertible into common stock, especially one that is trading like an equity issue because the optioned common stock share price is high.
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preferred stock or convertible bonds or warrants that can be converted into common stock
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a security that, because of the terms under which it was issued, is in substance the same as common stock
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A convertible security that is traded like an equity issue because the optioned common stock is trading high.
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Bond or preferred stock that is convertible into common stock. A warrant (or a right) to purchase common stock at a specified price, usually at a discount from market price, is also common stock equivalents. If common stock equivalents are converted, the equity of existing shareholders may become diluted. Thus, their conversion or exercise is factored in when calculating fully diluted earnings per share. See: Convertible Bond; Convertible Debenture; Convertible Preferred Stock; Convertible Securities; Dilution; Right; Warrant
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