Definition of redemption

1. right to call or redeem a firm's outstanding preferred stock by paying the preferred stockholders the par value of the stock plus a premium.
2. repayment of bonds by a call before maturity, usually involving a call premium.
3. repayment of mutual funds at net asset value when a shareholder's holdings are liquidated.

1. repayment of a debt security or preferred stock issue by payment of the principal at maturity, or at an earlier date if the issuer calls the security and pays a premium to debt security holders. Also, the liquidation of mutual fund shares by selling shares back to the fund's investment manager at the Net Asset Value (NAV) price.
2. mortgagor's right, called the equity of redemption, to recover foreclosed property by paying principal and interest due, plus the lender's out-of-pocket costs.
3. in bankruptcy, the right of a debtor to reclaim personal property by paying creditors the estimated fair market value of assets secured by a lien.

1. regaining possession by payment of a stipulated price; especially, process of annulling a defeasible title, such as is created by a mortgage or tax sale, by paying the debt or fulfilling other obligations.
2. for tax purposes, purchase by a corporation of its own stock.
3. in marketing, accepting a coupon for partial payment of goods bought.
4. acquisition by a corporation of its own stock in exchange for property, without regard to whether the redeemed stock is canceled, retired, or held as treasury stock.

repayment of a debt security or preferred stock issue, at or before maturity, at PAR or at a premium price.

Mutual fund shares are redeemed at Net Asset Value when a shareholder's holdings are liquidated.

1. exchanging a coupon, trading stamp, or similar device for a discount or premium.
2. percentage of coupons or trading stamps actually turned in; also called redemption rate.