Convertible Preferred Stock

Convertible Preferred Stock

Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares".

Notes:

Most convertible preferred stock is exchanged at the request of the shareholder, but sometimes there is a provision that allows the company (or issuer) to force conversion. The value of convertible common stock is ultimately based on the performance (or lack thereof) of the common stock.

See also: Common Stock, Convertible Bond, Convertibles, Mandatory Convertible, Participating Preferred Stock, Preferred Stock

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Convertible preferred stock

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