In that case, the company will promise to resume paying the preferred dividend plus any missed payments once its business improves.
FORBES: Forget The Dogs, For Rich Income Look To Dow Preferreds
Noah Rosenfarb, the Singers' financial adviser, invested money targeted for the down payment in short-term bonds, preferred stocks and dividend-paying stocks.
Many, but not all, preferred shares produce qualified dividend income that is taxed at a preferential rate of up to 20% versus the ordinary-income rate of as much as 39.6%.
WSJ: For Investors Seeking Income, Preferred Stock May Make Sense
Meanwhile, if you want a fund chock full of preferred stock that will give you qualified dividend income, look to the PowerShares Financial Preferred ETF, which produces 100% qualified income, says Ms. Woodham.
WSJ: For Investors Seeking Income, Preferred Stock May Make Sense
While Mr. Einhorn and others have proposed workarounds, including issuing "preferred stock" with fixed dividend payments, Prof.
Einhorn wants Apple to issue "iPrefs, " preferred shares with a guaranteed dividend, as a way of committing the company to sharing its massive profits with shareholders.
Mr Einhorn first approached Apple about his idea for the issue of perpetual preferred stock and a higher dividend payout for shareholders at the end of May, Apple said.
He said he thought Fannie Mae would never fail, but he denied that he told the client that there was an implicit guaranty that the government would pay the dividend on the preferred stock if Fannie couldn't pay it.
If Diamond hits earnings target by 2013, the warrants could be cancelled and replaced with preferred stock baring a 10% dividend for two years.
FORBES: Oaktree's $225M Investment To Lift Cracked Diamonds Foods
Investors should keep in mind that the shares are not cumulative, meaning that in the event of a missed payment, the company does not have to pay the balance of missed dividends to preferred shareholders before resuming a common dividend.
Those seeking tax-sheltered returns can do better, at least until 2011, by buying preferred stocks eligible for the 15% dividend tax rate.
The preferred shareholders simply do not receive a dividend for that period.
The Oracle got 50, 000 preferred shares with a 6% yearly dividend.
FORBES: GE To Redeem Preferred Stock From Berkshire: Warren Buffett Makes A Cool $1.2B
Also, think about adding (or keeping) preferred stock, which almost always carries a dividend to provide income.
Cumulative preferred stock buffers the risk of a skipped dividend payment by allowing past due dividends to accrue.
Mr Einhorn's proposals for releasing funds to shareholders involve "preferred" stock - which pays a fixed dividend over time.
The Journal also reported that these preferred shares will carry a 5 percent annual dividend that increases to 9 percent after five years.
That dividend tends to put a floor under the preferred, which doesn't exist for the common.
The broker said he recommended the Fannie preferred because it was highly-rated and paid a nice dividend.
Dividend boosts typically are not in the cards for preferred stockholders.
FORBES: Do Preferred Stocks Deserve a Place in Your Portfolio?
In the mean time, MF Global will pay a dividend of 6% per year in cash or common shares on the preferred securities.
Cube has a 2.3% dividend yield and if you elect to go it alone and buy its 7.75% redeemable perpetual preferred stock you can snag a 7.26% yield.
应用推荐