发信人: qili (qili), 信区: Economics
标 题: Re: common stock and preferred stock
发信站: The unknown SPACE (Fri Oct 15 08:48:18 1999), 转信
【 在 qili (qili) 的大作中提到: 】
: in a nut shell, a prefered stock is more like debt, only
: the dividends aren't taxable for the stock holder (under
: certain conditions), and aren't tax deductible for the
: stock issuer (it's the opposite for interest payments
: on a debt.
: I will follow up later.
a) prefered stock holders don't usually own a piece of
the company. a straight PS usually has maturity date by
which the PS is to be redeemed by the issuer (the company).
b) in a liquidation scenario, the PS holders are ahead
of the common stock holders. However, in reality, both
are so deeply subordinated that none is expected to
c) PS is usually used in combination of warrants or
convertion options; In the 80s, the Japanese issued
a lot of convertible PS and made lots of money with
it (the conversion became useless in the late
80s and early 90s); the same thing is happening in
the internet arena today: internet start-ups are using
zero-coupon (or pay-in-kind) convertible PS or convertible
debt in the private placement market.
d) PS can also be used as a way to transfer one's income
to a lower tax bracket (an effective tax shielter). IRS
has tightened its rules there significantly to make it
e) today, the most likely reason to use PS is to manage
income. Instituition investors (like a mutual fund) likes
to have some income (for dressing purposes), and yet
have high returns. PS does that well for them.
※ 来源:．The unknown SPACE bbs.mit.edu．[FROM: 18.104.22.168]