02-24-2014, 09:57 AM
Alex is correct. Preferred is above a common share when it comes to liquidation but after secured debt instruments (bonds).
It makes then interest rate sensitive rather than company performance sensitive although there can be a slight margin due to company performance although I haven't been able to see it and identify it as such. Sometimes it's just a function of market inefficiency.
It makes then interest rate sensitive rather than company performance sensitive although there can be a slight margin due to company performance although I haven't been able to see it and identify it as such. Sometimes it's just a function of market inefficiency.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan