Convertible preferred stock

(redirected from Convertible Stocks)
Also found in: Wikipedia.

Convertible preferred stock

Preferred stock that can be converted into common stock at the option of the holder. See also: participating convertible preferred stock.

Convertible Preferred Stock

A preferred stock that a stockholder may exchange, at any time after a waiting period, for common stock in the company issuing the bond. The number of shares one receives for each preferred share is determined when the convertible preferred stock is issued. A convertible preferred stock is a relatively low-risk investment because of the guaranteed dividends, but it affords the investor a great amount of leeway because he/she can exchange it for common shares, which have higher risk and higher returns. See also: Conversion ratio, Convertible bond.
References in periodicals archive ?
The TSE and SESC suspect that prices are pushed higher after investment funds operating in Hong Kong buy convertible stocks and third-party stocks issued by companies with deteriorating performance, and speculative investors in Japan make numerous buy orders for them.
However, the regulations define "an interest that is similar to an option" to include warrants, rights, convertible debt instruments, convertible stocks, puts, contracts to acquire or sell stock, and "other similar interests.