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convertible adjustable preferred stock (CAPS)

convertible adjustable preferred stock (CAPS) definition - business

convertible adjustable preferred stock (CAPS)

Preferred stock with a dividend tied to rates paid by U.S. Treasury securities. CAPS can be converted to cash or shares of stock when the following period's dividend is announced, a feature that adds liquidity and protects principal.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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