Retractable Preferred Shares

AAA

DEFINITION of 'Retractable Preferred Shares'

A specific type of preferred stock thats lets the owner sell the share back to the issuer at a set price. Typically, the issuer can force the redemption of the retractable preferred share for cash at maturity. Sometimes instead of cash, retractable preferred shares can be exchanged for common shares of the issuer.

INVESTOPEDIA EXPLAINS 'Retractable Preferred Shares'

This type of stock resembles a fixed-income bond but pays dividends instead of interest. The retractable feature allows for the value of these shares to remain steady at or above par value, as compared to the price of traditional preferred shares which fluctuate with changes in interest rates.

RELATED TERMS
  1. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  2. Bond

    A debt investment in which an investor loans money to an entity ...
  3. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  4. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  5. Security

    A financial instrument that represents: an ownership position ...
  6. Stock Dividend

    A dividend payment made in the form of additional shares, rather ...
Related Articles
  1. Because the difference between the number of authorized and outstanding shares can be so large, it's important that you realize what they are and which figures the company is using
    Investing Basics

    The Basics Of Outstanding Shares And The Float

    We go over different types of shares and what investors need to know about them.
  2. Bonds & Fixed Income

    A Primer On Preferred Stocks

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

    Don't Let Stock Prices Fool You

    Find out why a stock with a six-figure share price can still be a good value.
  4. Bonds & Fixed Income

    Introduction To Convertible Preferred Shares

    These securities offer an answer for investors who want the profit potential of stocks but not the risk.
  5. Options & Futures

    4 Steps To Picking A Stock

    Narrow down the universe of stocks to find the ones that best suit your needs.
  6. Economics

    When Stock Prices Drop, Where's The Money?

    Market perception can create money - and make it disappear into thin air.
  7. Options & Futures

    Writing Covered Calls On ETFs

    The strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.
  8. Bonds & Fixed Income

    What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields move in opposite directions.
  9. Taxes

    Why should I keep records on my tax-exempt bond transactions?

    Keep your purchase records on all investments, including tax-exempt bonds. Though the interest is tax-free, you may owe taxes if you sell your bond for a gain.
  10. Bonds & Fixed Income

    What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market sentiments.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center