Ernst looks at net income before extraordinary items divided by the sum of common and preferred equity and long-term debt.
Meanwhile, the Fed and Treasury are protecting (absorbing) banks by guaranteeing their debts and buying their preferred equity.
Next down the chain of capital, preferred equity and derivatives liabilities are eliminated.
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There are also a few alternatives, such as preferred equity and convertible bonds.
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Boston boutique quant shop ClearStream Investments rotated out of its preferred equity exchange traded funds after market close last Wednesday and move into cash.
Treasury and Federal Reserve officials have waffled between wanting to use the TARP to buy troubled assets and using it to make direct preferred equity investments.
The TARP, initially positioned as a pool of money to purchase toxic mortgage assets from banks, was ultimately used to inject capital directly into financial institutions in return for preferred equity stakes.
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Instead, he negotiated nearly riskless deals in preferred stocks with equity kickers.
Equity securities such as warrants, preferred stock, common stock and other equity interests, will principally be made in conjunction with debt investments.
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They own preferred shares in many banks, common equity in others and stand ready to inject capital in others still.
American banks own much of the preferred stock (a hybrid of debt and equity) that the two firms issued.
The new investors may buy convertible preferred securities, that is, bond-like equity with an option to change to a set number of common shares at an established price and at an exercise date in the future.
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The mix of your investments should include publicly traded fixed income and equity assets such as investment grade bonds, preferred stock and common stock.
Typically convertible preferred is attractive from a corporate standpoint because it tends to carry very low interest rates (in exchange for having equity-like upside from the option to convert into common stock).
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