Preferred Equity Redemption Stock - PERC

Preferred stock...but with a speed limit. These shares can convert to regular common stock under certain conditions, but the securities come with a price cap that limits the value of the shares received.

The securities represent a form of preferred stock, coming with a higher dividend compared to the one issued to the unwashed common shareholders. Meanwhile, the shares are convertible to common shares once certain conditions are met.

The conversion rate depends on the stock price at the time. Each of the PERCs comes with a certain strike price. Below the strike price, everyone gets exchanged for one share of common stock; in other words, the conversion ratio is one-to-one.
However, if the stock price rises above the strike price, the ratio becomes proportional to the price.

You have 20 PERCs with a $15 strike price. The total cap, then, on your holdings equals $300. When it comes to conversion time, the actual shares are trading at $30. So you get 10 shares of the common stock...$300 combined, the top value of the strike price.