Dividend Enhanced Convertible Stock - DECS

DEFINITION of 'Dividend Enhanced Convertible Stock - DECS'

Preferred stock that provides the holder with premium dividends in addition to an embedded short put option and a long call on the issuing company's stock.

BREAKING DOWN 'Dividend Enhanced Convertible Stock - DECS'

Dividend enhanced convertible stocks provide the holder with the right to convert the security into the underlying company's common stock.

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RELATED FAQS
  1. What is common stock and preferred stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ... Read Answer >>
  2. How do I use a premium put convertible?

    Holders of convertible bonds face all the pitfalls that traditional bondholders face - liquidity risk, interest rate risk ... Read Answer >>
  3. What is the difference between convertible and reverse convertible bonds?

    The difference between a regular convertible bond and a reverse convertible bond is the options attached to the bond. While ... Read Answer >>
  4. Can preferred stocks be traded like common stocks? Are their prices the same?

    First, let's look at the differences and similarities between common stocks and preferred stocks. Both represent a piece ... Read Answer >>
  5. How do dividends affect retained earnings?

    Find out how distribution of dividends affects a company's retained earnings, including the difference between cash dividends ... Read Answer >>
  6. What is dilutive stock?

    Dilutive stock is any security that dilutes the ownership percentage of current shareholders - that is, any security that ... Read Answer >>
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