Preferred Equity Redemption Stock - PERC


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.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Convertible Preferred Stock

    Preferred stock that includes an option for the holder to convert ...
  3. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  4. Synthetic

    A financial instrument that is created artificially by simulating ...
  5. Preferred Redeemable Increased ...

    First introduced by Merrill Lynch, PRIDES are synthetic securities ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
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