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Preferred Stock

Autor:   •  June 25, 2012  •  Essay  •  275 Words (2 Pages)  •  912 Views

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In my opinion, I prefer preferred stock than common stock .Many preferred stock are likely to be much steadier investments, says Jacoby. If the company goes bankrupt, the common stockholders will not receive their money until the creditors and preferred shareholders have received their respective share of the leftover assets. This makes common stock riskier than debt or preferred shares. .I classify preferred stock as fixed income. Generally speaking, it has lower volatility than common stock but the reason to buy preferred stock is usually for the interest or dividend payments. Preferred stocks would have made a lot more sense. Investors view preferred stock as a hybrid of bonds and common stock because it features fixed dividends and the chance for equity growth. There are advantages for the investor seeking income with lower risk than common stock. In my opinion, I prefer preferred stock than common stock .Many preferred stock are likely to be much steadier investments, says Jacoby. If the company goes bankrupt, the common stockholders will not receive their money until the creditors and preferred shareholders have received their respective share of the leftover assets. This makes common stock riskier than debt or preferred shares. .I classify preferred stock as fixed income. Generally speaking, it has lower volatility than common stock but the reason to buy preferred stock is usually for the interest or dividend payments. Preferred stocks would have made a lot more sense. Investors view preferred stock as a hybrid of bonds and common stock because it features fixed dividends and the chance for equity growth. There are advantages for the investor seeking income with lower risk than common stock.

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