Officially, what is convertible preferred stock?
It is a share of corporation ownership that gives holders a claim prior to the claim of common stockholders on earnings and, generally, on assets in the event of liquidation. It may also be exchanged for a fixed number of shares of common stock. Because no maturity date is stipulated, preferred stock is priced based on a stated dividend yield—in, for example, dollars, pounds, or euros—or as a percentage of par value.
