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Topic: Preferred Stock

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In the News (Sun 23 Jun 19)

  Stock (business) - MSN Encarta
Preferred stock shareholders are usually entitled to receive a fixed dividend before any payments are made to common stockholders.
Stock with first preference in the distribution of dividends or assets is called first preferred or, sometimes, preferred A; the next is called second preferred or preferred B, and so on.
Although holders of preferred stock may have to forego a dividend during a period of little or no profit, this is not true for two types of preferred stock.
encarta.msn.com /encyclopedia_761552539_3/Stock_(business).html   (872 words)

 Preferred Stock Valuation   (Site not responding. Last check: 2007-09-17)
Peferred stock is defined as equity with priority over common stock with respect to the payment of dividends and the distribution of assets in a liquidation.
Preferred stock is similar to common stock in that it entitles its owners to receive dividends which the firm must pay out of after-tax income.
The preferred dividend rate is expressed as a percentage of the par value of the preferred stock.
nalu.hpu.edu /mlane/BusinessFinanceOnline/SV/PreferredStock.html   (278 words)

 Preferred stock redemptions: waiting for updated regulations. (Federal Taxation)
Corporation X issues preferred stock for $60 that has a stated redemption price of $80 and is mandatorily redeemable at the end of live years.
Corporation X issues preferred stock for $60 that has no fixed redemption date, but is callable after five years at the option of the issuer at a price of $80.
If the stock is sold at the end of year three when the basis of the stock is $105.90, the shareholder computes gain or loss using this adjusted basis.
www.nysscpa.org /cpajournal/old/15203132.htm   (1588 words)

 preferred stock Definition
Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.
The main benefit to owning preferred stock is that the investor has a greater claim on the company’s assets than common stockholders.
Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders.
www.investorwords.com /3778/preferred_stock.html   (324 words)

 Check out preferred stock when looking for greater yield (Page 1 of 2)
A preferred stock is sort of a cross between a stock and a bond.
Preferreds can be found online and in newspaper stock tables, but until you're well-versed in the world of preferreds, rely on a broker or investment professional to help you select true preferreds that are right for your portfolio and your risk tolerance.
Another reason that preferreds are popular with some investors is preferred owners' principal, interest and dividends would be paid ahead of that of owners of common shares, in the event of a corporate bankruptcy.
www.bankrate.com /brm/news/investing/20050720a1.asp   (679 words)

 CMS BondEdge-fixed income portfolio and credit risk analytics
In many ways, preferreds are equivalent to bonds; then again, there are certain characteristics of preferreds that are definitely not “bond-like.” So, for fixed income professionals who may be looking at preferred stocks as a new asset class, this Back-to-Basics column will help you navigate through the characteristics and risk/return profile of this hybrid instrument.
Therefore, a preferred’s price is sensitive to a change in interest rates that affect the present value of these expected future cash flows, and we can compute duration and convexity as interest rate risk measures for preferred stock just as we do for bonds.
The credit risk of a preferred is greater than that of a bond issued by the same company, not only because an unpaid preferred dividend is not considered to be a default, but also because preferred shareholders have a junior claim on the firm’s assets in the event of a bankruptcy.
www.cmsbondedge.com /b2b/bb_prefstock.html   (1230 words)

 Preferred Stock
In most cases, preferred stock is offered to the public by the issuing company to acquire another company, or to improve capital and expansion at a time when stockholders and the public are not buying common stock.
Preferred stock is attractive to corporations because they can exclude most of the dividends received in the calculation of their taxable income.
Preferred stock is also inferior to debt, because when a company files for bankruptcy, all the bondholders receive their claim before preferred stockholders receive their claims, if anything is available.
www.henssler.com /radio/111601/u-tipweek.asp   (513 words)

 Our Funds - What Is Preferred Stock?
Preferred stock is an equity security that typically offers a fixed or floating dividend rate, but little, if any, potential for growth of capital.
An investor generally buys shares of a preferred stock with the investment goal of a relatively stable income yield rather than for the potential capital growth goal of a common stock investor.
The tax attributes of the dividends for each preferred stock are proportional to those of the net distributions of dividends and capital gains paid on the respective Fund's common stock.
www.roycefunds.com /funds/closedEndPreferred.asp   (570 words)

 Invest FAQ: Stocks: Preferred Shares
Garden-variety preferred shares are a lot like general obligation bonds/debentures; they are called shares, but carry with them a set dividend, much like the interest on a bond.
Some preferred shares also carry with them a conversion privilege (and hence may be called "convertible preferred"), normally at a fixed number of shares of common per share of preferred.
Thus, convertible preferred might perform like a bond early in its life (and its value as a pseudo-bond will be a floor under its price) and, if all goes well, as a (multiple of) common stock later in its life when the conversion value governs.
invest-faq.com /vse/stock-preferred.html   (924 words)

Preferred stockholders may be granted some voting rights, but normally those voting rights are limited to matters directly affecting their special rights as preferred stockholders.
If the stock is a cumulative preferred and the company fails to pay a dividend when due, the unpaid dividend obligation will accumulate for the benefit of the preferred stock owners.
Callable preferred stock may be called in for redemption by the company at a price which is set by the company at the time of issuance.
www.wdfi.org /ymm/brochures/investing/stocks.htm   (2821 words)

 Preferred Stock
Unlike common stock, which pays a variable dividend depending on the corporation's earnings, preferred stock pays a fixed quarterly dividend based on a stated par value.
Most preferred stock is issued with a sinking fund provision that requires that the issuer set aside funds to gradually retire the issue over time.
Convertible preferred stock has an embedded option that allows the holder to exchange each preferred share for a specified number of common shares.
www.riskglossary.com /articles/preferred_stock.htm   (852 words)

 Preferred Stock   (Site not responding. Last check: 2007-09-17)
Preferred issues trade like bonds, meaning that their prices move more in response to fluctuations in interest rates than in response to what happens to the companies that issue them.
Indeed, preferred shares are best considered as substitutes for bonds, a conservative way to raise portfolio income without going into bonds, which are subject to sharp price swings, the volatility becoming progressively greater as maturity lengthens.
Preferred shares are somewhat less sensitive to rates than bonds of the same duration because of their subordination to bonds.
www.efmoody.com /investments/preferred.html   (487 words)

 Uncommon valor - preferred stock Entrepreneur - Find Articles
Preferred stocks are rated by Moody's and Standard & Poor to give you a sound basis upon which to judge their quality.
Preferred stock issues are not as widely traded as common stock, so there may be a significant spread between the asking and bid price.
Part of the beauty of preferred stock is its predictability - a set dividend, a perpetual life span, set payment dates.
www.findarticles.com /p/articles/mi_m0DTI/is_n4_v25/ai_19325220   (890 words)

 8. REDEEMABLE CONVERTIBLE PREFERRED STOCK   (Site not responding. Last check: 2007-09-17)
The number of shares of Common Stock to which a holder of Series A Preferred Stock shall be entitled upon conversion shall be the product obtained by multiplying the Applicable Conversion Rate by the number of shares of Series A Preferred Stock being converted.
Stock concurrently with the occurrence of a "liquidity event,'' which is defined as (1) the liquidation, winding up or dissolution of the Company, (2) the sales of all or substantially all of the assets of the Company, or (3) the merger or consolidation of the Company with or into another entity.
The difference between the carrying amounts of the Series A Preferred Stock of $6,934,000 and $6,948,000 as of March 31, 1999 and 2000, respectively, and the redemption amount of $7,001,000 based upon the liquidation amount, represents the cost of issuance.
www.opnet.com /annual_report/ntcfs_8_rcps.html   (455 words)

 Taking Care of Business with Doctor J   (Site not responding. Last check: 2007-09-17)
A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders.
Preferred stock does not usually have voting rights.
From a credit stance, preferred shareholders have a claim prior to common stockholders, on earnings and assets in the event of liquidation.
www.tcbmarkets.com /terms/p/preferredstock.asp   (84 words)

 Participating Preferred Stock - Wikipedia, the free encyclopedia
Participating preferred stock is capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.
Holders of participating preferred stock get both their money back (with interest) and the money that is distributable with respect to the percentage of common shares into which their preferred stock can convert.
Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before the holders of common stock.
en.wikipedia.org /wiki/Participating_Preferred_Stock   (522 words)

 Picking a Stock [Types of Stocks]
The preferred stock owners are given their dividends before the common stock owners are.
The main drawback of preferred stocks is that they cannot benefit as much from company profits because they are only paid a fixed dividend payment.
Stocks can split into any number, but they can also reverse split which means that the stocks double in value, but you only get to keep half the stocks you had before.
library.thinkquest.org /3088/stockmarket/typesofstocks.html   (373 words)

 Preferred Stock
Preferred stock issued to venture capitalists is different than the preferred stock issued by publicly traded companies.
Preferred stock holders in venture deals usually have the right to convert their preferred stock into common stock at any time.
Stock options for employees are often excluded from the antidilution provisions as well along with rights to purchase stocks granted before the issuance of the preferred stock is also excluded.
www.jbv.com /lessons/lesson26.htm   (2426 words)

 Glossary: Preferred Stock
The dividend paid on a share of preferred stock is fixed in that that does not fluctuate with the profitability of the company.
Unlike common stock, preferred stock generally does not confer voting rights on the preferred shareholders.
However, owners of Preferred Stock have priority over owners of Common Stock with respect to dividends, bankruptcy and dissolution.
www.corporateboardminutes.com /glossary/preferredstock.shtml   (242 words)

 FASB: Embedded Derivatives: Mandatorily Redeemable Preferred Stock Denominated in either a Precious Metal or a Foreign ...
Does mandatorily redeemable preferred stock issued by the reporting entity with payments that are denominated in either a precious metal or a foreign currency contain an embedded derivative under paragraphs 12, 15, 188, and 195 of Statement 133 that is required to be identified and separately accounted for as a derivative by the issuer?
A reporting entity issues $100,000 of mandatorily redeemable preferred stock whose preferred dividends are payable in cash but that requires redemption at the end of 1 year for a payment of 312 ounces of gold.
Mandatorily redeemable preferred stock whose periodic preferred "dividend" payments, redemption payment, or both are payable only in a stipulated amount of a specified foreign currency contain no embedded foreign currency derivative that warrants separate accounting under Statement 133.
www.fasb.org /derivatives/issueb37.shtml   (1075 words)

 ETFConnect - Education Center - Preferred Shares - Know Your Funds
As long as the short-term interest rates paid to the preferred shareholders are lower than the net long-term rates earned by the underlying fund's portfolio, the fund’s common shareholders will earn higher rates that they would have without a preferred share class (without leverage).
If the short-term rates paid to the preferred shareholders approach the return earned by the fund’s portfolio, the beneficial effects of leverage are reduced and the additional amount available to distribute to common shareholders declines.
Preferred shares of municipal bond closed-end funds seek yields that compare favorably with other tax-free short-term instruments, or that compare favorably on an after-tax basis with any taxable short-term instruments.
www.etfconnect.com /education/fundamentals_pref.asp   (946 words)

 Preferred Stock
A security that represents an ownership interest in a corporation and gives the holder a claim, prior to any claims of common stockholders, on earnings and generally on assets in the event of liquidation.
Most preferred stock pays a fixed dividend, stated in a dollar amount or as a percentage of par value, whereas common stock dividends may fluctuate depending upon company earnings.
Preferred stock does not usually carry voting rights.
www.russell.com /us/glossary/equities/preferred_stock.htm   (80 words)

 Unisys | Investors | Stock FAQs
Unisys common stock (trading symbol "UIS") is listed for trading on the New York Stock Exchange, on exchanges in Amsterdam, Brussels, and London, and on the SWX Swiss Exchange.
Two previous series of cumulative convertible preferred stock, the Series B and Series C, were held by Mitsui and Co. Ltd.
Of the 28.4 million shares of the Series A preferred stock that were outstanding in the beginning of 1999, approximately 24.4 million shares were converted into 40.8 million shares of Unisys common stock in 1999.
www.unisys.com /about__unisys/investors/stock__faq.htm   (557 words)

 Dull Is Good: Preferred Stock - Forbes.com   (Site not responding. Last check: 2007-09-17)
Preferred stocks have several things in their favor: The dividends are usually fixed at the time the stock is issued and, thus, can't be slashed should the company fall on hard times.
The average preferred stock fell only 3% in the past year versus a 21% drop in the SandP 500.
Both funds have most of their holdings in utilities' and banks' preferred stock, and are closed-end funds, which means that they trade inter-day, like stock, and don't have a minimum investment requirement.
www.forbes.com /2002/11/18/cz_tm_1118sf.html   (731 words)

 Ask TheStreet: Preferred Stock
This form of stock is a hybrid security that is a little like debt and a little like equity.
Like common stock (which is what is most often bought and sold on the market), preferred stock can carry voting rights in the company, but like bonds, it has fixed cash payments that are made on a predetermined schedule.
Preferred share dividends are typically higher than the interest coupons on a company's bonds.
www.thestreet.com /university/askthestreet/10295532.html   (423 words)

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