Preferred Stock: Rapid Fire

What this video covers

• Why preferred stock is equity, not debt, and how that affects voting rights, pre-emptive rights, and liquidation priority
• The five types of preferred stock: cumulative, non-cumulative, participating, convertible, and callable, plus adjustable-rate and its six-month reset behavior
• The dividend order for cumulative preferred: arrears first, then current preferred, then common, and what happens when declared funds run short
• How to calculate conversion ratio, conversion value, and parity price using the $100 par value and the conversion price
• Why callable preferred is the issuer's right when rates fall, while convertible preferred is the holder's right when common rises
• The one-way conversion trap: what the holder gains and permanently loses by converting to common stock
• Why preferred stock has no maturity date, and how that creates greater interest-rate risk than a comparable bond