Convertibles are securities that can be changed from its initial form into another form, usually bonds/debentures or preferred shares, that can be converted into common stock. In simple terms a convertible security is a financial instrument whose holder has the right to convert it to equity of the same issuer.
Convertible preference stocks are preference shares that include an option for the holder to convert the shares into a fixed number of common shares after a predetermined date. These preferred stocks are paid dividends at a fixed rate, and additionally, they have the flexibility to convert into equity shares of the issuing entity.
“Information contained herein is for informational purposes only and should not be used in deciding any particular case. The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Though utmost efforts have been made to provide authentic information, it is suggested that to have better understanding and obtaining professional advice after thorough examination of particular situation.”
Prepared by : Laxman YallaArticle Assistant
Prepared On: 8/05/23
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