Convertible Securities, also known as dilutive securities, are financial instruments that can be converted into company's common shares, potentially increasing the total number of shares outstanding. There are several types of convertible securities: Stock Options: These are often issued to employees as part of their compensation package. They give the holder the right, but not the obligation, to buy a predetermined amount of common shares at a set price. Convertible Bonds: A form of debt that can be converted to shares. Warrants: These are similar to options in that they give the holder the right to purchase shares at a certain price before expiration.
Learn Convertible Securities with interactive examples and practice exercises in our Income Statement module.
This interactive learning module helps you understand Convertible Securities through hands-on practice and real-world examples.