Series 79: Convertible Preferred Stock

Convertible Preferred Stock

Convertible preferred stock pays dividends like regular preferred stock, but is convertible to common stock at the option of the holder. The conversion ratio is specified in an agreement between the company and the shareholder. For example, the preferred stock might be convertible to common stock at a 6:1 ratio, meaning one share of preferred can be converted to six shares of common. In this example, if a company’s stock is trading at $1