What key provision of a convertible security determines the number of shares received upon conversion?

The conversion ratio is the key provision of a convertible security that determines the number of shares an investor will receive upon conversion. It specifies how many shares of common stock one convertible security can be converted into, effectively translating the investment into equity.

For example, if a convertible bond has a conversion ratio of 20, this means that for every bond an investor holds, they can convert it into 20 shares of the company's stock. This provision is crucial as it directly impacts the potential equity stake an investor could acquire, and it often reflects the anticipated value of the underlying stock.

Other terms related to securities, such as exercise price, strike price, and redemption value, are associated with options or different forms of securities but do not impact the conversion mechanics of a convertible security in the same way as the conversion ratio does.