Call Price

AAA

DEFINITION of 'Call Price'

The price at which a bond or a preferred stock can be redeemed by the issuer. This price is set at the time the security is issued. Also referred to as "redemption price".

INVESTOPEDIA EXPLAINS 'Call Price'

For example, let's say the TSJ Sports Conglomerate issues 100,000 preferred shares with a face value of $100 with a call provision built in at $110. This means that if TSJ were to exercise its right to call the stock, the call price would be $110.

A company may exercise its right to call preferred stock if it wishes to discontinue payment of the dividend associated with the shares. It may choose to do this in an effort to increase earnings for common shareholders.

RELATED TERMS
  1. Callable Preferred Stock

    A type of preferred stock in which the issuer has the right to ...
  2. Contingent Convertibles - CoCos

    A security similar to a traditional convertible bond in that ...
  3. Conversion Price

    The price per share at which a convertible security, such as ...
  4. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  5. Convertibles

    Securities, usually bonds or preferred shares, that can be converted ...
  6. Issuer

    A legal entity that develops, registers and sells securities ...
Related Articles
  1. What is the difference between preferred ...
    Investing

    What is the difference between preferred ...

  2. Introduction To Convertible Preferred ...
    Bonds & Fixed Income

    Introduction To Convertible Preferred ...

  3. Convertible Bonds: An Introduction
    Bonds & Fixed Income

    Convertible Bonds: An Introduction

  4. Introduction To Commercial Paper
    Bonds & Fixed Income

    Introduction To Commercial Paper

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center