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11 Cards in this Set
- Front
- Back
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Main types of Preferred Stock
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(1) Redeemable Preferred (RP)
(2) Convertible Preferred (CP) (3) Participating Convertible Preferred (PCP) (4) Participating Convertible Preferred w/ Cap (PCPC) |
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Convertible Preferred
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Equity that can either be turned in for its redemption value or converted to common stock
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Conversion Condition
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An inequality for convertible prefered stock that requires that conversion value be greater than redemption value
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Redeemable Preferred (RP)
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P/S that pays a redemption value on liquidation, but does not offer the holder the option of conversion to common stock; a bondlike security that is senior to common stock but cannot be converted to C/S
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Participating Convertible Preferred (PCP)
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Convertible preferred stock that is entitled to a liquidation return, which includes both its redemption value and as-if conversion into common stock
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As-If Conversion
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A feature of PCP and PCPC stock where the stock receives its redemption value and also is entitled to participate in the upside as if it had been converted to common stock
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Participating Convertible with Cap (PCPC)
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Identical to PCP, except that the liquidation return is capped, even if there is no QPO
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Full-Ratchet Antidilution
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A strong version of antidiltion protection, where the adjusted conversion price is the lowest price paid by any later-round investor
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Weighted Average Antidilution
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A version of antidilution protection, where the adjusted conversion price is a weighted average of prices paid by all investors
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Adjusted Conversion Price
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The conversion price after antidilution protections have taken effect
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Adjusted Conversion Rate
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The conversion rate after antidilution protections have taken effect
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