convertible security

n.
A security that, at the holder's option, may be exchanged for another asset, typically a fixed number of shares of common stock.

Types of stocks and bonds that can be voluntarily converted into capital stock at a later date. Examples are convertible bonds and convertible preferred stock. The Conversion Ratio determines how many shares will be issued. For example, if a $100,000 convertible bond issue is convertible at 1 bond for 4 shares, 400 shares are involved calculated as follows:

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The noun has one meaning:

Meaning #1: a corporate security (usually bonds or preferred stock) that can be exchanged for another form of security (usually common stock)
  Synonym: convertible

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