callable preferred stock

Preferred stock that can be retired or redeemed at the option of the issuing corporation at the price stated in the preferred stock contract. The investor can either receive cash for the preferred stock based on the call price (redemption price), or can convert it into common stock. If a preferred stock is called, the stockholder is entitled to receive the par value of the stock, a call premium, any dividends in arrears, and part of the current period’s dividend.