Call Price
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".
Investopedia Commentary
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.
Related Links
Convertible Bonds: An Introduction
Introduction To Convertible Preferred Shares
See also: Busted Convertible Security, Callable Preferred Stock, Contingent Convertibles - CoCos, Conversion Price, Convertible Bond, Convertibles, Dividend, Issuer, Mandatory Convertible, Preferred Stock
Also spelled: redemption price
call price