C.Preferred issues which deviate from the standard pattern with respect to the holder's right to vote : Preferred stock usually has either no voting power or voting power shared with the common in such proportions that the latter is able to outvote the former.
Following is a partial list :
1.Classic examples of voting control of preferred stockholders.
Typical Examples :
2.Preferred stock with exclusive voting power.
Examples :
3. Preferred stock with controlling amount of voting power.
Examples :
4.Preferred stock with preponderant voting power due to multiple voting.
Examples :
5.Two preferred issues of same company with combined voting power in excess of that of the common .
Examples :
6.Preferred issues attaining exclusive voting power upon occurrence of certain events-usually failure to pay dividends for specified periods .
Examples :
7.Preferred issues which attain the right to elect a majority of the directors in the event of certain defaults .
Examples :
This brings us to the end of the deviation of Preferred shares in terms of dividend income , claim on assets and voting powers . Check out our next post which describes the difference between the common stocks and its deviation from the three factors .
Subscribe To
Posts
All Comments
Wednesday, December 16, 2009
Preferred stocks which deviate from the standard pattern -Part 2
B.Preferred issues which deviate from the standard pattern with respect to the holders's interest in assets:
1.Preferred issues with no claim on assets whatever..
Typical Examples :
2.Preferred issues with no preference to assets .
Typical Examples.
3.Preferred issue with abnormally low preference to assets in relation to par value and dividend rate.
Typical Examples :
4.Preference to assets subject to voluntary modification on the part of the holder by shifting his position .
(1)Convertible issues discussed above are of this type.
(2) Warrant-bearing issues also fall into this class where the holder has the right to surrender his preferred in exercising his subscription privilege.
5.Preferred issues with a right to share in surplus assets beyond a stated sun payable on liquidation.
(1) Preferred stocks with participating dividends which share in surplus assets.
(2) Preferred stocks which do not carry participation dividend rights but which have the right to share in surplus assets.
6.Preferred stocks with participating dividends but without rights to share in surplus assets.
Typical Examples :
7.Preferred stock with mortgage lien.
Typical Examples :
8. Preferred stock callable at very high premium.
Typical Examples.
9.Preferred stock subject to compulsory redemption .
Typical Examples.
10. Preferred stocks guaranteed as to principal in event of liquidation.
Typical Examples :
Preferred shares with the holders right to vote continued next post ( contd... Part 3 )
1.Preferred issues with no claim on assets whatever..
Typical Examples :
2.Preferred issues with no preference to assets .
Typical Examples.
3.Preferred issue with abnormally low preference to assets in relation to par value and dividend rate.
Typical Examples :
4.Preference to assets subject to voluntary modification on the part of the holder by shifting his position .
(1)Convertible issues discussed above are of this type.
(2) Warrant-bearing issues also fall into this class where the holder has the right to surrender his preferred in exercising his subscription privilege.
5.Preferred issues with a right to share in surplus assets beyond a stated sun payable on liquidation.
(1) Preferred stocks with participating dividends which share in surplus assets.
(2) Preferred stocks which do not carry participation dividend rights but which have the right to share in surplus assets.
6.Preferred stocks with participating dividends but without rights to share in surplus assets.
Typical Examples :
7.Preferred stock with mortgage lien.
Typical Examples :
8. Preferred stock callable at very high premium.
Typical Examples.
9.Preferred stock subject to compulsory redemption .
Typical Examples.
10. Preferred stocks guaranteed as to principal in event of liquidation.
Typical Examples :
Preferred shares with the holders right to vote continued next post ( contd... Part 3 )
Preferred stocks which deviate from the standard pattern
A.Preferred issues which deviate from the standard patter with respect to the holder's interest in income :
1.Optional-dividend issues : Gives the holder the option of receiving his dividend either in cash at a stated rate or in fractional shares of common stocks .
Typical Examples :
2.Participating preferred issues :
(1) Participation with the common stock without priority as to dividends :
Typical Examples :
(2)Participation with the common begins immediately after the preferred has received its prior dividend.
Typical Examples :
(3) Participation begins after the preferred has received its prior dividend and the common has received the same amount per share .
Typical Examples :
(4) Staggered participation .
Typical Examples :
(5) Participation with common begins after preferred has received a prior dividend and the common has received smaller amount per share .
Typical Examples :
(6) Participation begins after the preferred has received a prior dividend and the common has received a larger amount per share.
Typical Examples .
(7) Participation unlimited .
Typical Examples .
(8)Multiple Participation.
Typical Examples .
(9) Participation limited to a stated proportion of profits without specific upper limited specific upper limit in dollars .
Typical Examples.
(10) Participation limited to a stated proportion of profits , subject to a definite maximum per share.
Typical Examples.
(11) Participation limited to a maximum sum in dollars.
Typical Examples.
3.Convertible preferred issues : Such issues afford the holder the opportunity to increase his income return through shifting from the limited-income status to straight preferred stock to the unlimited contingent-income position of the common stockholder.Variations in the duration and other terms of the privilege resemble those given above for the convertible bonds and are not reported in full detail below.
(1) Duration of conversion privilege unlimited:
Typical Examples.
(2) Duration of conversion privilege limited.
Typical Examples.
(3) Duration not subject to termination through redemption .
Typical Examples.
(4) Duration subject to termination through redemption :
Typical Examples.
(5)Conversion Privilege terminated through redemption of the issue to be extended through issuance of warrants to represent privilege.
Typical Examples.
(6) Conversion price varies with extent to which holders exercises the privilege.
Typical Examples.
(7) Conversion price varies in accordance with a stated time schedule.
Typical Examples.
(8) Preferred stock convertible into bonds at the company's option in case earnings meet certain minimum requirements.
Typical Examples.
(9) Preferred which is convertible and participating .
Typical Examples.
(10) Preferred which is convertible into a participating issue.
Typical Examples.
(11) Preferred which is convertible at the option of the corporation into the units of common and another class of preferred stock.
Typical Examples.
(12) Preferred issue only part of which can converted.
Typical Examples.
4.Preferred stock with stock-purchase warrants: Such issues also afford the holder the right to modify his interest in corporate income beyond the stated dividend rate on the preferred stock alone.These warrants vary in much the same way as do those attached to bonds discussed above, and a detailed consideration of the variations would therefore be repetitious . Some of the leading variations are given below with examples of each .
(1) Preferred stocks issed with perpetual warrants :
Typical Examples.
(2) Preferred stocks issued with warrants which expire after a given date .
Typical Examples.
(3) Warrants attached to preferred stock entitling the holder to purchase stock at a flat price throughout life of the warrant.
Typical Examples.
(4) Preferred stock issued with warrants entitling the holder to purchase stock at prices varying in accordance with a time schedule.
Typical Examples.
(5) Preferred stock issued with warrants for purchase of stock at prices varying with interest to which the privilege is exercised.
Typical Examples.
(6) Preferred stock issued with warrants for the purchase of additional shares of the same issue.
Typical Examples :
(7) Preferred stock issued with warrants for the purchase of common stock.
Typical Examples :
(8) Preferred stock issued with warrants for the purchase of an issue senior to the common stock .
Typical Examples :
(9) Preferred stock issued with warrants for the purchase of stock in another corporation.
Typical Examples :
(10) Preferred stock issued with warrants which are exercisable only by payment of the subscription price in cash .
Typical Examples :
(11) Preferred stock which may be surrendered at par in payment for common stock obtained through exercise of stock-purchase warrants.
Typical Examples.
(12) Preferred stock issued with detachable warrants.
Typical Examples.
(13) Preferred stock issued with warrants which are detachable only in case of redemption of the senior issue or upon exercise.
Typical Examples.
(14) Convertible preferred stock with stock-purchase warrants.
Typical Examples.
(15) Participating preferred stock with stock-purchase warrants .
Typical Examples.
(16) Convertible issue with warrants and with option to receive dividends in cash or in common stock .
Typical Examples :
5.Miscellaneous deviations with reference to the interest of the holder in income :
(1) Accumulated unpaid dividends draw interest at a specific percentage.
Typical Examples.
(2) Preferred stock without preferences of any kind ( really common ).
Typical Examples :
(3) Preferred stock whose dividend requirements rank ahead of the bonds of the company.
Typical Examples :
(4) Preferred stock with dividend payment mandatory through guarantee.
Typical Examples :
(5) Preferred dividend rate adjusted on a definite scale in relation to profits.
Typical Examples :
(6) Preferred dividend rate dependent upon rate unpaid on other issues.
Typical Examples :
(7) Preferred issues with definitely graduated dividend rates
Typical Examples :
(8) Preferred stock entitled to extra dividends in directors discretion.
Typical Examples.
(9) Dividend rate increased to compensate for loss of conversion privilege .
Typical Examples.
(10) Preferred issue entitled to all residual earnings after a limited dividend was paid to it and then common .
Typical Examples :
End to claim on earnings of preferred issue , next post claim of preferred issue on assets ( contd.. )
1.Optional-dividend issues : Gives the holder the option of receiving his dividend either in cash at a stated rate or in fractional shares of common stocks .
Typical Examples :
2.Participating preferred issues :
(1) Participation with the common stock without priority as to dividends :
Typical Examples :
(2)Participation with the common begins immediately after the preferred has received its prior dividend.
Typical Examples :
(3) Participation begins after the preferred has received its prior dividend and the common has received the same amount per share .
Typical Examples :
(4) Staggered participation .
Typical Examples :
(5) Participation with common begins after preferred has received a prior dividend and the common has received smaller amount per share .
Typical Examples :
(6) Participation begins after the preferred has received a prior dividend and the common has received a larger amount per share.
Typical Examples .
(7) Participation unlimited .
Typical Examples .
(8)Multiple Participation.
Typical Examples .
(9) Participation limited to a stated proportion of profits without specific upper limited specific upper limit in dollars .
Typical Examples.
(10) Participation limited to a stated proportion of profits , subject to a definite maximum per share.
Typical Examples.
(11) Participation limited to a maximum sum in dollars.
Typical Examples.
3.Convertible preferred issues : Such issues afford the holder the opportunity to increase his income return through shifting from the limited-income status to straight preferred stock to the unlimited contingent-income position of the common stockholder.Variations in the duration and other terms of the privilege resemble those given above for the convertible bonds and are not reported in full detail below.
(1) Duration of conversion privilege unlimited:
Typical Examples.
(2) Duration of conversion privilege limited.
Typical Examples.
(3) Duration not subject to termination through redemption .
Typical Examples.
(4) Duration subject to termination through redemption :
Typical Examples.
(5)Conversion Privilege terminated through redemption of the issue to be extended through issuance of warrants to represent privilege.
Typical Examples.
(6) Conversion price varies with extent to which holders exercises the privilege.
Typical Examples.
(7) Conversion price varies in accordance with a stated time schedule.
Typical Examples.
(8) Preferred stock convertible into bonds at the company's option in case earnings meet certain minimum requirements.
Typical Examples.
(9) Preferred which is convertible and participating .
Typical Examples.
(10) Preferred which is convertible into a participating issue.
Typical Examples.
(11) Preferred which is convertible at the option of the corporation into the units of common and another class of preferred stock.
Typical Examples.
(12) Preferred issue only part of which can converted.
Typical Examples.
4.Preferred stock with stock-purchase warrants: Such issues also afford the holder the right to modify his interest in corporate income beyond the stated dividend rate on the preferred stock alone.These warrants vary in much the same way as do those attached to bonds discussed above, and a detailed consideration of the variations would therefore be repetitious . Some of the leading variations are given below with examples of each .
(1) Preferred stocks issed with perpetual warrants :
Typical Examples.
(2) Preferred stocks issued with warrants which expire after a given date .
Typical Examples.
(3) Warrants attached to preferred stock entitling the holder to purchase stock at a flat price throughout life of the warrant.
Typical Examples.
(4) Preferred stock issued with warrants entitling the holder to purchase stock at prices varying in accordance with a time schedule.
Typical Examples.
(5) Preferred stock issued with warrants for purchase of stock at prices varying with interest to which the privilege is exercised.
Typical Examples.
(6) Preferred stock issued with warrants for the purchase of additional shares of the same issue.
Typical Examples :
(7) Preferred stock issued with warrants for the purchase of common stock.
Typical Examples :
(8) Preferred stock issued with warrants for the purchase of an issue senior to the common stock .
Typical Examples :
(9) Preferred stock issued with warrants for the purchase of stock in another corporation.
Typical Examples :
(10) Preferred stock issued with warrants which are exercisable only by payment of the subscription price in cash .
Typical Examples :
(11) Preferred stock which may be surrendered at par in payment for common stock obtained through exercise of stock-purchase warrants.
Typical Examples.
(12) Preferred stock issued with detachable warrants.
Typical Examples.
(13) Preferred stock issued with warrants which are detachable only in case of redemption of the senior issue or upon exercise.
Typical Examples.
(14) Convertible preferred stock with stock-purchase warrants.
Typical Examples.
(15) Participating preferred stock with stock-purchase warrants .
Typical Examples.
(16) Convertible issue with warrants and with option to receive dividends in cash or in common stock .
Typical Examples :
5.Miscellaneous deviations with reference to the interest of the holder in income :
(1) Accumulated unpaid dividends draw interest at a specific percentage.
Typical Examples.
(2) Preferred stock without preferences of any kind ( really common ).
Typical Examples :
(3) Preferred stock whose dividend requirements rank ahead of the bonds of the company.
Typical Examples :
(4) Preferred stock with dividend payment mandatory through guarantee.
Typical Examples :
(5) Preferred dividend rate adjusted on a definite scale in relation to profits.
Typical Examples :
(6) Preferred dividend rate dependent upon rate unpaid on other issues.
Typical Examples :
(7) Preferred issues with definitely graduated dividend rates
Typical Examples :
(8) Preferred stock entitled to extra dividends in directors discretion.
Typical Examples.
(9) Dividend rate increased to compensate for loss of conversion privilege .
Typical Examples.
(10) Preferred issue entitled to all residual earnings after a limited dividend was paid to it and then common .
Typical Examples :
End to claim on earnings of preferred issue , next post claim of preferred issue on assets ( contd.. )
Bonds that deviate from the conventional level of participation
C. Modifications of the rule that the bondholder has no further interest in assets or profits beyond the promise to pay a principal sum at maturity and a definite rate of interest meanwhile , and no voice in the management :
1) Participating bonds ( note great variation in basis of participation ) :
Typical Examples :
2) Convertible Bonds : These constitute the largest single group of exceptions to the rule that the bondholder has a definitely limited interest in assets and earnings . The number of variations in the terms of convertible issues is practically unlimited.The variations play mainly upon the conversion ratio, the duration of the privilege , the security into which the issue is convertible , special limitations upon the right to convert , and combinations of these factors. The following classified list is only a partial one. It should be noted that the terms of the privilege are usually subject to alternate through operation of anti dilution clauses.
(1) Duration of the privilege subject to termination through the reserved right of the corporation to call the issue :
Typical Examples :
(2) Same as foregoing , but right to call issue is suspended for a stated period following issuance.
Typical Examples :
(3) Non callable convertible issues :
Typical Examples :
(4) Convertible issues not subject to redemption until after the privilege has expired .
Typical Examples :
(5) Duration of the privilege limited only by maturity or prior redemption :
Typical Examples :
(6) Privilege expires on definite date prior to maturity :
Typical Examples :
(7) Privilege is not operative from the date of issuance , but begins only after the lapse of a specified period of time :
Typical Examples :
(8) Issues convertible into stock or other bonds at the option of the obligor :
Typical Examples :
(9) Issues convertible by either the holder or the obligor under special limitations upon the right to convert :
Typical Examples :
(10) Issues convertible only when certain conditions with reference to earnings have been met :
Typical Examples :
(11) Only a part of the issue may be converted :
Typical Examples :
(12) Amount in any one year limited to stated maximum :
Typical Examples :
(13) Duration of the privilege terminated when given number of shares have been exchanged for bonds :
Typical Examples :
(14) Issues convertible into common stock ( most customary arrangement) :
Typical Examples :
(15) Issues convertible into preferred stock :
Typical Examples :
(16) Issues convertible into class A Stock which is junior to one or more preferred shares :
Typical Examples :
(17) Bonds convertible into other bonds ( usually short-term notes into longer term issues , to give the holder the option of repayment or of continuing his investments)
Typical Examples :
(18) Bonds convertible into units of two or more issues :
Typical Examples :
(19) Bonds convertible into either of two classes of preferred stocks or into either of two classes of common stocks :
Typical Examples :
(20) Other special and more complicated arrangements of the foregoing types :
Typical Examples :
(21) Bonds convertible into securities of a company other than the obligor :
Typical Examples :
(22) Bonds convertible into an issue which is itself convertible :
Typical Examples :
(23) Bonds convertible into an issue which is both participating and convertible :
Typical Examples :
(24) Issues converted into bonds of preferred stocks which carry stock-purchase warrants :
Typical Examples :
(25) Bonds convertible into participating issues :
Typical Examples :
(26) Bonds convertible into stock upon surrender of the bonds and payment of a further sum in cash :
Typical Examples :
(27) Bonds convertible into stock upon surrender of the bond , with the option of obtaining larger amount of stock upon payment of further sum in cash :
Typical Examples :
(28) Bonds convertible into stocks at a flat price throughout the life of the privilege :
Typical Examples :
(29) Bonds convertible into stock at prices which vary in accordance with a specified time schedule :
Typical Examples :
(30) Bonds convertible into stock at prices which vary in accordance with the extent of which the holders have exercised the privilege :
Typical Examples :
3. Bonds with stock-purchase warrants : These also give the holder an interest in assets and earnings beyond the participation therein afforded to the holder of a standard bond . The variations in the terms of warrants-bearing issues are about as numerous as those pertaining convertible bonds.The following is a partial list.The terms of the privilege are usually subject to alteration through operation of anti dilution clauses.
(1) Privilege terminated with maturity of the bond :
Typical Examples :
(2) Privilege expires prior to the maturity of the bond :
Typical Examples :
(3) Duration of subscription privilege subject to termination through exercise of right to redeem the issue :
Typical Examples :
(4) Warrant entitles holder to purchase stocks at a flat price throughout the life of the privilege :
Typical Examples :
(5) Warrant entitles holder to buy stock at prices which vary in accordance with a specified time schedule :
Typical Earnings :
(6) Warrant entitles holder to buy stock at prices determined by the order in which the warrants are exercised :
Typical Examples :
(7) Warrant entitled holder to purchase stock at the higher of two prices , one being dependent upon the cost of foreign exchange in terms of dollars :
Typical Examples :
(8) Bonds carrying warrants for a bonus in common stock :
Typical Examples :
(9) Bonds carrying two different warrants entitling holder to purchase common stock on separate scales of prices at the same time :
Typical Examples :
(10) Bonds carrying various warrants entitling holder to exchange the bond for stock on one scale of prices and to subscribe for additional stock on another scale of prices :
Typical Examples :
(11) Bonds carrying warrants for purchase of constant number of shares at a flat price :
Typical Examples :
(12) Bonds carrying warrants for purchase of a varying number of shares at a flat price :
Typical Example :
(13) Bonds carrying warrants for purchase of a varying number of shares at various prices :
Typical Examples :
(14) Bonds carrying warrants entitling the holder to purchase a participating Class A stock :
Typical Examples :
(15) Bonds carrying warrants entitling the holder to purchase a convertible preferred issue :
Typical Examples :
(16) Bonds carrying warrants entitling the holder to purchase a block or unit of stock consisting of two or more issues :
(17) Bonds with warrants which are detachable only at the time the warrant is exercised or upon redemption of the bond :
Typical Examples :
(18) Warrant detachable upon exercise but becoming void when issue is called :
Typical Examples :
(19) Detachability of warrant subject to formal approval by the corporation.
Typical Examples :
(20) Bonds carrying warrants which became detachable upon issuance of bonds :
Typical Examples :
(21) Bonds carrying warrants which became detachable only after the lapse of a specified period following issuance of the bonds :
Typical Examples :
(22) Warrants exercisable only upon payment of the subscription price in cash .
Typical Examples :
(23) Warrants permitting payment of the subscription price either in cash or in face value of the bonds to which they were attached :
Typical Examples :
4.Bonds with mixed privileges :
(1) Convertible bonds with stock purchase warrants :
Typical Examples :
(2) Convertible bonds which were also participating :
Typical Examples :
(3) Participating bonds with warrants attached :
Typical Examples :
5. Bonds with a voice in management :
(1) Classic example of bond with full voting power was the $ 10,000,000 issue of 5% bonds of United States Shipbuilding Company issued in 1902 to Mr.Charles M.Schwab in partial payment for his stock in Bethlehem Steel Co. The voting rights attaching to these bonds enabled Mr.Schwab to control the United States Shipbuilding Co.
Typical Examples :
(2) Bonds with restricted voting powers :
Typical Examples :
That was the end to the section on Bonds ! Preferred stocks next ! :)
1) Participating bonds ( note great variation in basis of participation ) :
Typical Examples :
2) Convertible Bonds : These constitute the largest single group of exceptions to the rule that the bondholder has a definitely limited interest in assets and earnings . The number of variations in the terms of convertible issues is practically unlimited.The variations play mainly upon the conversion ratio, the duration of the privilege , the security into which the issue is convertible , special limitations upon the right to convert , and combinations of these factors. The following classified list is only a partial one. It should be noted that the terms of the privilege are usually subject to alternate through operation of anti dilution clauses.
(1) Duration of the privilege subject to termination through the reserved right of the corporation to call the issue :
Typical Examples :
(2) Same as foregoing , but right to call issue is suspended for a stated period following issuance.
Typical Examples :
(3) Non callable convertible issues :
Typical Examples :
(4) Convertible issues not subject to redemption until after the privilege has expired .
Typical Examples :
(5) Duration of the privilege limited only by maturity or prior redemption :
Typical Examples :
(6) Privilege expires on definite date prior to maturity :
Typical Examples :
(7) Privilege is not operative from the date of issuance , but begins only after the lapse of a specified period of time :
Typical Examples :
(8) Issues convertible into stock or other bonds at the option of the obligor :
Typical Examples :
(9) Issues convertible by either the holder or the obligor under special limitations upon the right to convert :
Typical Examples :
(10) Issues convertible only when certain conditions with reference to earnings have been met :
Typical Examples :
(11) Only a part of the issue may be converted :
Typical Examples :
(12) Amount in any one year limited to stated maximum :
Typical Examples :
(13) Duration of the privilege terminated when given number of shares have been exchanged for bonds :
Typical Examples :
(14) Issues convertible into common stock ( most customary arrangement) :
Typical Examples :
(15) Issues convertible into preferred stock :
Typical Examples :
(16) Issues convertible into class A Stock which is junior to one or more preferred shares :
Typical Examples :
(17) Bonds convertible into other bonds ( usually short-term notes into longer term issues , to give the holder the option of repayment or of continuing his investments)
Typical Examples :
(18) Bonds convertible into units of two or more issues :
Typical Examples :
(19) Bonds convertible into either of two classes of preferred stocks or into either of two classes of common stocks :
Typical Examples :
(20) Other special and more complicated arrangements of the foregoing types :
Typical Examples :
(21) Bonds convertible into securities of a company other than the obligor :
Typical Examples :
(22) Bonds convertible into an issue which is itself convertible :
Typical Examples :
(23) Bonds convertible into an issue which is both participating and convertible :
Typical Examples :
(24) Issues converted into bonds of preferred stocks which carry stock-purchase warrants :
Typical Examples :
(25) Bonds convertible into participating issues :
Typical Examples :
(26) Bonds convertible into stock upon surrender of the bonds and payment of a further sum in cash :
Typical Examples :
(27) Bonds convertible into stock upon surrender of the bond , with the option of obtaining larger amount of stock upon payment of further sum in cash :
Typical Examples :
(28) Bonds convertible into stocks at a flat price throughout the life of the privilege :
Typical Examples :
(29) Bonds convertible into stock at prices which vary in accordance with a specified time schedule :
Typical Examples :
(30) Bonds convertible into stock at prices which vary in accordance with the extent of which the holders have exercised the privilege :
Typical Examples :
3. Bonds with stock-purchase warrants : These also give the holder an interest in assets and earnings beyond the participation therein afforded to the holder of a standard bond . The variations in the terms of warrants-bearing issues are about as numerous as those pertaining convertible bonds.The following is a partial list.The terms of the privilege are usually subject to alteration through operation of anti dilution clauses.
(1) Privilege terminated with maturity of the bond :
Typical Examples :
(2) Privilege expires prior to the maturity of the bond :
Typical Examples :
(3) Duration of subscription privilege subject to termination through exercise of right to redeem the issue :
Typical Examples :
(4) Warrant entitles holder to purchase stocks at a flat price throughout the life of the privilege :
Typical Examples :
(5) Warrant entitles holder to buy stock at prices which vary in accordance with a specified time schedule :
Typical Earnings :
(6) Warrant entitles holder to buy stock at prices determined by the order in which the warrants are exercised :
Typical Examples :
(7) Warrant entitled holder to purchase stock at the higher of two prices , one being dependent upon the cost of foreign exchange in terms of dollars :
Typical Examples :
(8) Bonds carrying warrants for a bonus in common stock :
Typical Examples :
(9) Bonds carrying two different warrants entitling holder to purchase common stock on separate scales of prices at the same time :
Typical Examples :
(10) Bonds carrying various warrants entitling holder to exchange the bond for stock on one scale of prices and to subscribe for additional stock on another scale of prices :
Typical Examples :
(11) Bonds carrying warrants for purchase of constant number of shares at a flat price :
Typical Examples :
(12) Bonds carrying warrants for purchase of a varying number of shares at a flat price :
Typical Example :
(13) Bonds carrying warrants for purchase of a varying number of shares at various prices :
Typical Examples :
(14) Bonds carrying warrants entitling the holder to purchase a participating Class A stock :
Typical Examples :
(15) Bonds carrying warrants entitling the holder to purchase a convertible preferred issue :
Typical Examples :
(16) Bonds carrying warrants entitling the holder to purchase a block or unit of stock consisting of two or more issues :
(17) Bonds with warrants which are detachable only at the time the warrant is exercised or upon redemption of the bond :
Typical Examples :
(18) Warrant detachable upon exercise but becoming void when issue is called :
Typical Examples :
(19) Detachability of warrant subject to formal approval by the corporation.
Typical Examples :
(20) Bonds carrying warrants which became detachable upon issuance of bonds :
Typical Examples :
(21) Bonds carrying warrants which became detachable only after the lapse of a specified period following issuance of the bonds :
Typical Examples :
(22) Warrants exercisable only upon payment of the subscription price in cash .
Typical Examples :
(23) Warrants permitting payment of the subscription price either in cash or in face value of the bonds to which they were attached :
Typical Examples :
4.Bonds with mixed privileges :
(1) Convertible bonds with stock purchase warrants :
Typical Examples :
(2) Convertible bonds which were also participating :
Typical Examples :
(3) Participating bonds with warrants attached :
Typical Examples :
5. Bonds with a voice in management :
(1) Classic example of bond with full voting power was the $ 10,000,000 issue of 5% bonds of United States Shipbuilding Company issued in 1902 to Mr.Charles M.Schwab in partial payment for his stock in Bethlehem Steel Co. The voting rights attaching to these bonds enabled Mr.Schwab to control the United States Shipbuilding Co.
Typical Examples :
(2) Bonds with restricted voting powers :
Typical Examples :
That was the end to the section on Bonds ! Preferred stocks next ! :)
Bonds that deviate in repayment of principal :
B. Modifications of the unqualified rights to repayment of a fixed principal amount on a fixed date :
1) Noncallable, perpetual bonds :
Typical Examples :
2) Callable bonds without specified maturity date :
Typical Examples :
3) Bonds payable at option of the obligor after a specified date :
Typical Examples :
4) Bonds payable at the option of the holder on or after a specified date :
Typical Examples :
5) Bonds falling due on sale or reorganization of company :
Typical Examples :
6) Bonds optional as to character of principal payment :
Typical Examples :
7) Bonds with repayment of principal subject to nullification through option of the obligor to convert them into stock :
Typical Examples :
8) Bonds maturing at a premium above par ( sum is fixed but non standard) :
Typical Examples :
9) Bonds redeemable prior to maturity at a discount from par :
Typical Examples :
10) Bonds payable at an amount dependent upon general level of prices : ( RRB*)
Typical Examples :
1) Noncallable, perpetual bonds :
Typical Examples :
2) Callable bonds without specified maturity date :
Typical Examples :
3) Bonds payable at option of the obligor after a specified date :
Typical Examples :
4) Bonds payable at the option of the holder on or after a specified date :
Typical Examples :
5) Bonds falling due on sale or reorganization of company :
Typical Examples :
6) Bonds optional as to character of principal payment :
Typical Examples :
7) Bonds with repayment of principal subject to nullification through option of the obligor to convert them into stock :
Typical Examples :
8) Bonds maturing at a premium above par ( sum is fixed but non standard) :
Typical Examples :
9) Bonds redeemable prior to maturity at a discount from par :
Typical Examples :
10) Bonds payable at an amount dependent upon general level of prices : ( RRB*)
Typical Examples :
Bonds that deviate from the standard pattern .
A. Modification of the unqualified right to a fixed-interest payment on fixed dates :
1) Income Bonds : These are sometimes called "Adjustment Bonds." The amount of interest payable thereon is dependent upon the amount of earnings available therefor up to a stated maximum.Payment of interest is sometimes wholly of partially discretionary with the directors.Interest may be cumulative or non cumulative.
Typical Examples :
2) Hybrid issues on which interest is contingent for a time and a fixed charge thereafter :
Typical Examples :
3) Bonds on which a part of the interest burden is a fixed charge and a part contingent upon earnings and/or upon the discretion of the directors :
Typical Examples :
4) Bonds on which interest payments may be deferred :
Typical Examples :
5) Issues on which the rate of interest is graduated up or down :
Typical Examples :
6) Bonds with the option of the holder receiving his interest payments in cash or in stock of the company :
Typical Examples :
7) Non-interest-bearing obligations : ( Zero Coupon Bonds / Strip Bonds ) :
Typical Examples :
8) Rate of interest contingent upon rate paid on the preferred stock of the obligor :
Typical Examples :
9) Interest payment subordinated to dividends on preferred stocks of the obligor :
Typical Examples :
1) Income Bonds : These are sometimes called "Adjustment Bonds." The amount of interest payable thereon is dependent upon the amount of earnings available therefor up to a stated maximum.Payment of interest is sometimes wholly of partially discretionary with the directors.Interest may be cumulative or non cumulative.
Typical Examples :
2) Hybrid issues on which interest is contingent for a time and a fixed charge thereafter :
Typical Examples :
3) Bonds on which a part of the interest burden is a fixed charge and a part contingent upon earnings and/or upon the discretion of the directors :
Typical Examples :
4) Bonds on which interest payments may be deferred :
Typical Examples :
5) Issues on which the rate of interest is graduated up or down :
Typical Examples :
6) Bonds with the option of the holder receiving his interest payments in cash or in stock of the company :
Typical Examples :
7) Non-interest-bearing obligations : ( Zero Coupon Bonds / Strip Bonds ) :
Typical Examples :
8) Rate of interest contingent upon rate paid on the preferred stock of the obligor :
Typical Examples :
9) Interest payment subordinated to dividends on preferred stocks of the obligor :
Typical Examples :
Thursday, December 10, 2009
Sub-Prime Mortgage Crisis , and how we got here ?
What is a Sub Prime Mortgage ? What actually is a Prime Mortgage , and what is a Mortgage after all ? Why am I suffering when I still paid all my bills on time , and was the best employee at the office ? Is there a way out of it ? If so how , and when ?
Investor and Speculation
The recent market downturn , has alarmed a lot of people about the financial markets , and clearly made a lot of us think about the difference between Investor and Speculators ? What do these words mean ? Lets have a closer look at the same .
Since decades , media has confused itself with the terms investors and speculators . But , lets look at what Respected Mr.Benjamin Graham had to say in his book Intelligent Investor written decades ago .
" Investment is one which , upon thorough analysis promises safety of principal , and a decent return , any other form is not an investment " . Return is a subjective matter depending upon the investor , and his level of content . This makes much more sense , as anything multiplied with zero eventually is zero at the end . So if principal isn't looked after .
Since decades , media has confused itself with the terms investors and speculators . But , lets look at what Respected Mr.Benjamin Graham had to say in his book Intelligent Investor written decades ago .
" Investment is one which , upon thorough analysis promises safety of principal , and a decent return , any other form is not an investment " . Return is a subjective matter depending upon the investor , and his level of content . This makes much more sense , as anything multiplied with zero eventually is zero at the end . So if principal isn't looked after .
Subscribe to:
Posts (Atom)