DEFINITION of 'Preferred Equity Redemption Stock - PERC'
Preferred stock with special provisions limiting the value of its convertible shares and the mandatory redemption value at maturity.
BREAKING DOWN 'Preferred Equity Redemption Stock - PERC'
PERCs generally offer a higher yield than common stocks. However, they can be called at any time, generally at a higher price than the cap price. When the PERC matures, it must be redeemed into either cash or underlying shares.