If-Converted Method

Business, Legal & Accounting Glossary

Definition: If-Converted Method

If-Converted Method

Full Definition of If-Converted Method

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.

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December 08, 2022 https://payrollheaven.com/define/if-converted-method/.
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If-Converted Method. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/if-converted-method/ (accessed: December 08, 2022).
American Psychological Association (APA):
If-Converted Method. PayrollHeaven.com. Retrieved December 08, 2022
, from PayrollHeaven.com website: https://payrollheaven.com/define/if-converted-method/

Definition Sources

Definitions for If-Converted Method are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.