callable preferred stock

Definition

A preferred stock that allows the issuer to repurchase the issued stock at a predetermined price. The right to repurchase is usually exercised when market rates fall below the preferred stock rate at time of issue. A firm issues this type of stock to protect itself from obligations to pay guaranteed dividends in the future.

Use this term in a sentence

You should try and see if you can get in on any callable preferred stock early when the price is still good.

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We had been sure to include the clause or provision to have access to callable preferred stock as we were concerned about price fluctuations.

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When Etsy went public, they made sure they had a callable preferred stock option in place in case they wanted to regain some of the shares sold.

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