Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Preferred Stocks – Know the Fundamentals

By Chris Adam Subscribe to RSS | June 6th 2012 | Views:
loading
 
  



Preferred stocks offerings provide an organization with alternatives to borrow money from several financial institutes like banks as well some other capital lending agencies. What is the most common scenario? In most of the situation, companies may well defer or even cut some substantial dividends or go into the arrears without facing any penalty or undue risk to their personal credit ratings. This may well be the reason why so many companies choose this procedure of financing over issues related to corporate debts.

preferred stocks are considered to be totally hybrid investments. It is because they can act both as bond as well stocks. In most common cases, they are considered senior debts to the common stock. However, they are much subordinate to every corporate bond.

In case of liquidation events, it is the shareholders who will be considered frontliners to receive payment beneath bond holders. Rating is provided by top level credit organizations like Poor’s & Moody’s, standard, etc. Those who are looking for the highest yields, they can approach towards the local bank. This will allow them to believe that stock market as well economy will definitely recover on its continuity state.

There are several benefits of preferred stocks. They can be easily convertible to income stock. The stockholders will have option to turn their shares into income stock depending on stock issuance factor. Also, higher preference will be given to dividends. The chances are higher for owners to receive dividends that the common shareholders will be deprived of.

However, there are certain drawbacks also. These are totally nonvoting stocks. Stockholders will not have any sort of voting rights. Also, stocks can be called in by issuant when faced with some emergency situation.

Chris Adam - About Author:
For more information on income stock, check out the info available online at http://www.epreferreds.com/

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/finance-articles/preferred-stocks-know-the-fundamentals.htm

Related Finance Articles Subscribe to RSS

Hidden opportunities in preferred stock
Published by Isol on August 13th 2012 | Finance

Preferred stock typically is issued for innovative investors or other institutional investors. I...
 
Tips of investing in Australian dividend stocks
Published by Isol on August 13th 2012 | Finance
The word "dividend" is comes from the Latin word "dividendum" ("thing to be divided"). Dividend mean...
 
Acquaintance of dividend yield with Australian dividend stocks
Published by Isol on August 13th 2012 | Finance
Dividend yield is an easy way to compare various dividend-paying stocks. It tells an investor that t...
 
Choosing the best dividend stocks
Published by Isol on August 13th 2012 | Finance

If however you always be searching for top dividend shares about, next there are a large number ...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...