Residual Security

Residual Security - Residual Security is both an interesting and, very effective tool used by many investors and, businessmen in the business industry for diluting the earnings per share on initial stock issued. This is a common practice within the business community in order to increase the number of shares of outstanding common stocks held. This in turn will generate a source of income for the business in question through the eventual sale and, trading of this individual common stock into the public realm. Most often this practice used in the conversion of convertible bonds also referred to as a residual security.