Definition of Involuntary liquidation preference

Involuntary liquidation preference

A premium that must be paid to preferred or preference stockholders if
the issuer of the stock is forced into involuntary liquidation.

Liquidation

When a firm's business is terminated, assets are sold, proceeds pay creditors and any leftovers
are distributed to shareholders. Any transaction that offsets or closes out a Long or short position. Related:
buy in, evening up, offsetliquidity.

Liquidation rights

The rights of a firm's securityholders in the event the firm liquidates.

Liquidation value

Net amount that could be realized by selling the assets of a firm after paying the debt.

Liquidity preference hypothesis

The argument that greater liquidity is valuable, all else equal. Also, the
theory that the forward rate exceeds expected future interest rates.

Preference stock

A security that ranks junior to preferred stock but senior to common stock in the right to
receive payments from the firm; essentially junior preferred stock.

Liquidation Value

The net proceeds (after taxes and expenses) of selling the assets
of a company at fair market prices

preference decision

the second decision made in capital project evaluation in which projects are ranked according to their impact on the achievement of company objectives

Liquidation

The process of selling off all the assets of a business entity, settling its liabilities,
and closing it down as a legal entity.

liquidation

Sale of bankrupt firm’s assets.

liquidation value

Net proceeds that would be realized by selling the firm’s assets and paying off its creditors.

LIFO Liquidation

A reduction in the physical quantity of an inventory that is accounted for
using the LIFO inventory method.

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