Convertible Preferred Stock is a type of investment that combines features of both preferred stock and common stock. Investors who hold this stock receive fixed dividends, similar to preferred shares, but they also have the option to convert their shares into a predetermined number of common shares at a later date. This feature allows investors to benefit from potential price appreciation of the company's common stock. This type of stock is often attractive to investors because it offers a steady income through dividends while also providing the opportunity for capital gains. Companies may issue convertible preferred stock to raise capital while giving investors a chance to participate in the company's growth.