Preferred stock is form of ownership in company. You may hear about preferred stock before. But company has more option for finance operation. Therefore preferred stock take care different common stock. Moreover, check performance of preferred stocks. Hence, view how to buy preferred stock.
Types of Preferred stock
However, preferred stock is four kind of stock. In addition, like cumulative, non cumulative, participating and convertible. Hence, see advantages and disadvantages of preferred stocks. Moreover, check how to calculate cumulative preferred stock dividend.
Cumulative Preferred Stock
Cumulative Preferred Stock is kind of preferred stock. But it has order that if any dividend payment are missed in past. And that dividend needs to pay first to cumulative shareholders. Moreover, if dividend are unpaid or paid. So unpaid dividend stock can add for future date when they declared.
However, many companies have variety of stock classes. Therefore common stocks are standard class and made up of owners. Because, it has voting right and can control future of company. Moreover, cumulative shares have special right. And it let them to collect undeclared dividends.
Similarly, it is like your saving account. Probably, cumulative shareholders are undertaking for certain amount of dividend in year. But this amount will pay all the time. However, dividend that is not pay will go into your saving account. And it also known as dividend is in arrears. See Cumulative Preferred stock example.
Non Cumulative Preferred Stock
Non Cumulative stock do not pay missed out dividend. However, non cumulative stock will not see in arrears. In addition, preferred stock is issue with dividend rate. Because, if company decide not to pay dividend. You do not have right to say unpaid dividend in future. Probably, for better understand see calculation of Non Cumulative preferred stock.
Similarly, Non cumulative shareholders are flexible. And they can manage their cash flow. Because, payment can balance without any penalty. In addition, company will not make any dividend with lose on Non cumulative stock. You have right to purchase stock as shareholders. Check Non Cumulative Preferred stock list.
Participating Preferred Stock
Participating stock gives right to get equal dividend. Furthermore, participating preferred shareholders have right to get price back on purchase. Moreover, Participating preferred stocks also have liquidity. Hence, see list of participating preferred stock in India.
However, shares will get high dividend than common dividend. Probably, if company turn more profit. So dividend will pay to stockholders. Hence, check participating preferred shares capital. For more details See Participating Preferred stock calculation.
Convertible Preferred Stock
Convertible shares will change into specific number of shares. And preferred stock is known as Convertible preferred stock. Because, some preferred stock have right to convert. Hence, see convertible common stock list. Moreover, for more detail Convertible Preferred stock example.
Probably, in future company may convert all your preferred stock into common share. Therefore you have an option to convert preferred shares into fixed number of common shares. Mostly convertible preferred stock is exchange at request of shareholders. But sometime company will force to convert into common stock. Hence, convertible common stock value is based on performance.
Finally, see classes of stocks. Since, preferred shares take fixed dividend payment. However, view common stocks and dividend. Hence, to know more details check common stock and preferred stock examples. Therefore see Preferred stocks analysis.