Assessable Security
Definition of 'Assessable Security'A type of stock that companies issued to investors at a discount to its face value in exchange for the right to come back for more money at a later date. Assessable securities cannot be assessed for more than the difference between the purchase price and face value. In other words, if you bought an assessable stock with a face value of $20 for just $2, the company might later ask you for another $18 if it needed more money. Under Rule 136 of the Securities Act of 1933, the issuing company could resell the stock if the holder did not pay the assessment. |
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Investopedia explains 'Assessable Security'Assessable stock has not been traded or issued in the United States for decades, but assessable stock is still a topic on the Series 63 exam. Exam takers are required to know that a gift of assessable stock is considered a sale. Today, all securities are non-assessable, and if companies need to raise more money, they issue additional stock or bonds. |
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