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Auction Rate Preferred Stock

   Also found in: Acronyms 0.01 sec.
Auction rate preferred stock (ARPS)
Floating rate preferred stock, whose dividend is adjusted every seven weeks through a Dutch auction.

Auction Preferred Stock
A preferred stock with an adjustable dividend that changes every seven weeks according to the results of a Dutch auction. Every preferred stock has a guaranteed dividend; an auction market preferred stock is distinguished by the fact that the amount of its dividends changes from time to time. An auction market preferred stock is beneficial for some investors because the auction reveals the current market yield every seven weeks, which helps in investment decisions on whether to buy, sell, or hold. It is also called an auction rate preferred stock or a Dutch auction preferred stock.


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Auction rate preferred stocks are actually money-market instruments, since the dividend is reset every 49 days through a Dutch auction.
3) Initial growth of the auction rate preferred stock market was so rapid that the total dollar value of new auction rate issues exceeded the amount of convertible preferred stock and fixed rate preferred issued in 1987 (Houston and Houston |6~).
NYSE:DSM) authorized each Fund to redeem up to 25 percent of its auction rate preferred stock ("ARPS"), subject to market, regulatory and other conditions and factors.
 
 
 
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