Callable Common Stock


DEFINITION of 'Callable Common Stock'

A security that represents ownership in a corporation that has voting rights, whose owners are last to be paid if the company liquidates and which is redeemable by the issuing corporation, at a predetermined price or at a premium to the current market price. Typically, callable common stock is issued for a subsidiary company by its parent company. The parent company reserves the right to buy back the shares of the subsidiary company, should it become strategically beneficial.

BREAKING DOWN 'Callable Common Stock'

Common stock is usually non-callable; it must be specifically designated as callable at the time of sale, if the corporation wants to have the option to redeem it. Otherwise, common stock will remain on the market indefinitely, unless the company chooses to buy back its shares on the open market, has its shares delisted or goes bankrupt.

  1. Putable Common Stock

    Common stock that gives investors the option to put the stock ...
  2. Callable Preferred Stock

    A type of preferred stock in which the issuer has the right to ...
  3. Subsidiary

    A company whose voting stock is more than 50% controlled by another ...
  4. Parent Company

    A company that controls other companies by owning an influential ...
  5. Callable Bond

    A bond that can be redeemed by the issuer prior to its maturity. ...
  6. Common Stock

    A security that represents ownership in a corporation. Holders ...
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