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.

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RELATED FAQS
  1. What is the difference between redemption of shares and repurchase of shares?

    Sometimes, shares of stock offered by a company are not regular, market-driven common shares. Instead, they may be preferred ... Read Answer >>
  2. Why should a company buy back shares it feels are undervalued instead of redeeming ...

    Discover the difference between common stock and preferred stock. When is repurchase preferable to redemption, and what factors ... Read Answer >>
  3. An investor with 1,000 shares of the Amazing Growth fund places a redemption order ...

    The correct answer is a. The investor placed her redemption order before the close of the market on Friday, so she will redeem ... Read Answer >>
  4. Why do preferred stocks have a face value and why is it different than market value?

    Read about the differences between the face value and market value of a preferred stock, including why preferred stocks often ... Read Answer >>
  5. Why would an investor opt for a partial redemption as opposed to a full redemption?

    Learn about the difference between a partial redemption and a full redemption, and why an investor might choose to partially, ... Read Answer >>
  6. Why would a company choose to repurchase in lieu of redeem?

    Learn the difference between a stock repurchase and a stock redemption, and find out about the reasons why a company might ... Read Answer >>
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