Adjustable-Rate Preferred Stock - ARPS
Barron's Finance & Investment Dictionary:
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Adjustable-Rate Preferred Stock - ARPS
preferred stock, whose dividend instead of being fixed is adjusted, usually quarterly, based on changes in the Treasury bill rate or other money market rate. The prices of adjustable rate preferreds are less volatile than fixed rate preferreds. Also called floating rate or variable rate preferred.
See also caps; dutch auction preferred stock; Mandatory Convertibles.
See also caps; dutch auction preferred stock; Mandatory Convertibles.
| Adjustable Rate Mortgage (ARM), Adjustable Life Insurance | |
| Adjusted (or modified) Book Value, Adjusted Balance Method |
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Adjustable-Rate Preferred Stock - ARPS
Investopedia Financial Dictionary:
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Adjustable-Rate Preferred Stock - ARPS
A type of preferred stock where the dividends issued will vary with a benchmark, most often a T-bill rate. The value of the dividend from the preferred share is set by a predetermined formula to move with rates, and because of this flexibility preferred prices are often more stable then fixed-rate preferred stocks.
Investopedia Says:
The preferred category of stocks are more secure as they will be one of the first of the equity holders to receive dividend payments in the event of the company's liquidation. There is often a limit to the amount the rate can change on the dividend, adding further security to the issue.
Related Links:
Offering both income and relative security, these uncommon shares may work for you. A Primer On Preferred Stocks
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Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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