The price at which a bond or a preferred stock can be redeemed by the issuer. This price is set at the time the security is issued. Also referred to as "redemption price".
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For example, let's say the TSJ Sports Conglomerate issues 100,000 preferred shares with a face value of $100 with a call provision built in at $110. This means that if TSJ were to exercise its right to call the stock, the call price would be $110.
A company may exercise its right to call preferred stock if it wishes to discontinue payment of the dividend associated with the shares. It may choose to do this in an effort to increase earnings for common shareholders.
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Find out about the nuts and bolts, pros and cons of investing in bonds. Convertible Bonds: An Introduction
These securities offer an answer for investors who want the profit potential of stocks but not the risk. Introduction To Convertible Preferred Shares
