Call Price


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".


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.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Conversion Price

    The price per share at which a convertible security, such as ...
  4. Contingent Convertibles - CoCos

    A security similar to a traditional convertible bond in that ...
  5. Busted Convertible Security

    A convertible security that is trading well below its conversion ...
  6. Callable Preferred Stock

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