Convertible 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.

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 ?
On July 10, 1989, Boise's board created a new series of convertible preferred stock especially for the ESOP.
5 million for newly issued convertible preferred stock and a commitment to provide $37.
EARNINGS PER SHARE FOR ESOP CONVERTIBLE PREFERRED STOCK