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.