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what is the difference between callable preferred shares and redeemable preferred stock ?

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  • what is the difference between callable preferred shares and redeemable preferred stock ?


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Answer #1 | 20/12 2013 08:38
Most confusion in finance comes from the lack of definition. Define your terms accurately. A Callable Preferred Stock is a type of preferred stock in which the issuer has the right to call in or redeem the stock at a preset price after a defined date. Callable: The majority of preferred shares are redeemable, giving the issuer the right to redeem the stock at a date and price specified in the prospectus. http://www.investopedia.com/articles/stocks/06/preferredstock.asp http://en.wikipedia.org/wiki/Preferred_stock
Answer #2 | 20/12 2013 10:23
"Most confusion in finance comes from the lack of definition" Hmm...and all this time I was thinking that confusion was caused by partial information, unknowable futures, non-linearities, randomness, unknown distribution structures, etc, etc... If I had only known that Investopedia would straighten that out... "callable preferred shares" = "redeemable preferred stock". Throw in words like convertible or mandatory and there are differences.
Answer #3 | 20/12 2013 12:55
A type of preferred stock in which the issuer has the right to call in or redeem the stock at a preset price after a defined date. The terms of a callable preferred stock issue, such as the call price, the date after which it can be called, and the call premium (if any) are all defined in the prospectus at the time of issue and cannot be changed later.

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