Convertible Preferred Stock
/kənˈvɜːrtəbl prɪˈfɜːrd stɑːk/
Definitions
- (n.) A class of preferred stock that holders may convert into common stock, usually at a specified ratio and time.
The investor exercised her option to convert her convertible preferred stock into common shares.
Related terms
See also
Commentary
Convertible preferred stock balances fixed dividend rights with potential equity upside, and drafting should specify conversion terms clearly.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.