PDSnet Glossary

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Definition

This is a preference share which can be converted into an ordinary share on a specified future date. This gives a higher degree of security than buying ordinary shares directly because the progress of the company can be ascertained before a decision is made on whether to give up their preferential dividend for the less secure but potentially more profitable ordinary dividend. Convertible preference shares are often called "near-equities" because as they approach their conversion date, they behave more and more like the ordinary shares that they will become.

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