Definition Convertible Preferred Stock. Description.
Convertible Preferred
Stock can be exchanged, usually after a predetermined date, for shares
of common stock according to the
conversion ratio stated in
the prospectus of the preferred stock contract.
These stocks offer the holder the possibility to choose the
best out of two options if the market value of the company's common stock
rises:
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Benefit from the appreciation through the rising price of
the preferred stock, or
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Benefit from the built-in stock option by exchange the convertible
stock to common stock at the fixed ratio.
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Convertible Preferred Stock Special Interest Group
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Compare with:
Convertible Bond |
Conversion Price |
Conversion Ratio |
Preferred Stock |
Venture Capitalists
| Unissued Stock
| Treasury Stock
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Convertible Preferred Stock Sponsor
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Special Interest Group Leader
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