A preferred stock that has no redemption date. In other words, this fixed-rate equity instrument allows the holder no participation in the issuer’s profits (it pays no dividends), and has no defined maturity or repayment date. However, this stock has a claim on earnings senior to the claim of common shares. A perp (or perpetual preferred stock) is usually used by financial institutions to obtain permanent equity capital. Sometimes, stock issuers prefer to enhance this stock with a call option that permits them to recall the issue after a specific period of time. Perpetual preferred stocks may either be issued directly or by virtue of conversion of other securities (such as convertible bonds).