 Sam
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Joined: 21 May 2005
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 Posted: Fri Apr 09, 2004 3:30 am Post subject: Preferred Stocks |
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Preferred stocks entitles the shareowners to receive a fixed dividend, that are senior to and payable before, any common stock dividends and they may also have the preference in the distribution of assets. They normally represent a non-voting ownership interest in a corporation.
Two factors largely determine the value of a preferred stock:
- the price at which it is convertible into common stock and
- the level of its fixed dividend.
They are normally recommended for investors seeking income and is largely owned by institutions and corporations because provisions in the tax laws allow dividends that they receive from preferred stock to be largely tax-exempt. |
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