What conditions are there attached to the ownership of preferred shares of stock?
Answers: Like common stock, preferred stock represents partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, preferred stock pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred stock is that you have a greater claim on the company's assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders.
In general, there are four different types of preferred stock:
Cumulative: These shares give their owners the right to "accumulate" dividend payments that were skipped due to financial problems; if the company later resumes paying dividends, cumulative shareholders receive their missed payments first.
Non-Cumulative: These shares do not give their owners back payments for skipped dividends.
Participating: These shares may receive higher than normal dividend payments if the company turns a larger than expected profit.
Convertible: These shares may be converted into a specified number of shares of common stock.
e.g.: Tata Steel is currently offering Cumulative Convertable Prefered (CCP) shares for its common stock holders. Convertible on 01-09-2009 at a ratio of 1 common share for every 6 prefered shares.
Since preferred shares carry fixed dividend payments, they tend to fluctuate in price far less than common shares. This means that the opportunity for both large capital gains and large capital losses is limited. Because preferred stock, like bonds, has fixed payments and small price fluctuations, it is sometimes referred to as a "hybrid security."
What is the difference between "preferred" shares of a stock and familiar shares?
It seems that if you hold preferred shares, you get more gain from a stock's rise?Answers: for preferred you are gaurenteed a dividened, but you have no speak in the company. for adjectives it is the opposite, you enjoy a say contained by the company, but are not gaurenteed a dividend
What does 1pt contained by the stock flea market index represent?
For example, the Dow Jones is at around 13000, Hang Seng is at 27000. What does it represent?Answers: POINTS, or value per share.
those numbers are an average of the stocks that are within the index, but based on a shipment for that stock, the numbers get funny when a stock splits, consequently the stock price is less, but the 'weight' within the index doesnt change,, check out www.thewallstreethunter.com they enjoy an example of the weighted index, and you can see how different stocks are heavier than others,, its at the bottom of the page under company profiles...
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