Contingent Voting Power

AAA

DEFINITION of 'Contingent Voting Power'

A provision granting voting rights to preferred shareholders when the company cannot uphold the obligations outlined in the preferred shareholder arrangement. Contingent voting powers offer the shareholders additional security for holding preferred instruments.

INVESTOPEDIA EXPLAINS 'Contingent Voting Power'

With preferred stock, the primary source of income is generated from dividends because capital appreciation is minimal. Contingent voting powers may come into effect when the firm fails to make the dividend, eliminating the revenue of the preferred group. Armed with the power to vote, preferred shareholders may seek to remedy the financial difficulties that are restricting dividends by voting in new directors.

RELATED TERMS
  1. Preferred Stock

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

    The right of a stockholder to vote on matters of corporate policy ...
  3. Contingent Value Rights - CVR

    A type of right given to shareholders of an acquired company ...
  4. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  5. Participating Preferred Stock

    A type of preferred stock that gives the holder the right to ...
  6. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
Related Articles
  1. Investing Basics

    Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  2. Bonds & Fixed Income

    A Primer On Preferred Stocks

    Offering both income and relative security, these uncommon shares may work for you.
  3. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  4. Stock Analysis

    Is It Time To Shun Altria Group?

    If you're in the market for a high-yielding dividend stock with an unmatched history of shareholder returns, then you can't do better than Altria Group .
  5. Stock Analysis

    Free Cash Flow Separates Delta From The Pack

    The U.S. airline industry has experienced a stunning revival in the past few years. No need to look hard to find airlines with doubledigit profit margins.
  6. Stock Analysis

    How Realty Income Became A Top Dividend Stock?

    Real-estate investment trusts have gained in popularity over the years as income investors look for reliable stream of cash from their portfolios.
  7. Stock Analysis

    Is Ariad On Track To Lose More Shares?

    The past two years have been a roller-coaster ride that shareholders in cancer-focused biotech Ariad Pharmaceuticals won't soon forget.
  8. Mutual Funds & ETFs

    Preferred Stock ETFs: Are They Right for You?

    Considering preferred stock ETFs? Here's a look at their pros and cons.
  9. Stock Analysis

    How Will Chesapeake Energy Create Value?

    A few years ago, Chesapeake Energy's bloated balance sheet forced it to sell off assets at fire-sale prices and fund its aggressive capital spending plan.
  10. Stock Analysis

    What's DISH’s Strategic Direction In The Industry?

    Telecommunications industry has evolved from being a backwater of ultra-conservative utility-like stocks to a high-growth area for cutting-edge investors.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center