How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
A new question is answered every 9 seconds

Ask a Financial Professional

Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: General
Satisfied Customers: 2137
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946
Type Your Finance Question Here...
characters left:
2 Financial Professionals are Online Now

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Last | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
  • Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
  • He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX
 
 
 

Preferred Stock

Preferred stock, also known as preferred shares refers to equity securities with the features of both equities and debts. They are generally rated higher than common stock but lower than bonds. Given below are top questions about stocks that have been answered by the Experts.

What is the similarity between a preferred stock and debt?

Preferred stock pays a fixed amount to people in the form of a dividend similar to the interest that is paid on debt. This is how preferred stock and debt are similar.

How is the required return calculated on preferred stock?

The formula for calculating required return on preferred shares is dividend/market price.

What is the formula for calculating the cost of preferred stock if one knows the dividend, sale price and flotation cost?

If one knows the dividend amount, sale price and floatation cost, then the formula for calculating the price of the preferred stock would be dividend/sale price minus floatation cost.

Are preferred stock and common stock different?

A preferred stock is generally ranked higher than the common stock. Its terms are decided between the investor and the corporation. Common stock, on the other hand is a type of security. It is a corporate equity ownership. Preferred stocks and common stocks are different from each other in many ways. Some of the differences are given below:

In most situations, common stock is given to founders and employees of a company through the employee stock option whereas preferred stocks are issued to other investors.

Preferred stock holders may have a bigger claim in the company’s assets. As a result, if a company needs to be liquidated, the common stock holders may not receive anything till all the preferred stock holders have received their share.

Generally, the dividends of preferred stock are greater than common stock and are paid at regular intervals. The dividends of common stock may not be paid at regular intervals as the decisions about paying or not paying these dividends may be taken by the company’s board of directors.

Preferred stocks are in no way dependant on the market and hence are considered as a more stable form of investment in comparison to common stock.

In what way is a perpetual bond similar to preferred shares?

A perpetual bond, like preferred shares, has a fixed rate which is paid to the owner of the bond. Both perpetual bonds and preferred shares get their value from taking the interest or dividends.

Would preferred stocks be considered a good investment option?

Preferred stocks may be considered a good investment option by many people due to its various advantages. Some of these advantages are a bigger claim for the stock holders in the company’s assets and earnings and greater dividends in comparison to common stocks.

What would happen if a cash dividend was declared on a preferred stock?

In most situations, if a cash dividend was declared on preferred stock, the retained earnings would reduce. This in turn would decrease the total stock holder’s equity.

When you put money into preferred stocks, it is your hard earned money that you are parting with. Hence, you need to be sure that you have understood every feature of the stock correctly and are taking an informed decision. Sometimes you may not find it simple to understand the various pros and cons of preferred stocks without professional help. In such situations, you can ask an Expert and get your questions answered before you invest your money into these stocks.

Ask a Financial Professional

Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: General
Satisfied Customers: 2137
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946
Type Your Finance Question Here...
characters left:
2 Financial Professionals are Online Now

How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Financial Professionals are online & ready to help you now

Ron
ASE Certified Technician
Satisfied Customers: 21624
23 years with Ford specializing in drivability and electrical and AC. Ford certs and ASE Certs
Dr. Y.
Urologist
Satisfied Customers: 18634
I am fellowship trained specializing in general urology and reconstructive urology.
John
Home Appliance Technician
Satisfied Customers: 13453
Appliance repair business owner for over 43 years.

Recent Preferred Stock Questions

  • I have been calling customer service at the company that serviced

    I have been calling customer service at the company that serviced a previous mortgage paid off through a refinance last April. In August, I reported the refund check that was sent out on May 1 had been lost. Since then I have been getting a pretty good run-around (I'll receive a form in the mail, the computers are down, my account is showing an error, I'll have resolution within 30 days, etc.) Have also faxed and mailed my query/request for a replacement check.
    I can't imagine that it's anything more than ineptness, but since most checks state they are void after 6 months, I am concerned about losing the refund over this detail. Is there a governing board I can contact today to make sure my request stays open? I'm only finding overseers to the lending itself. Please advise.
  • I have been taking care of an elderly man who has physical

    I have been taking care of an elderly man who has physical and mental problems for the past 3-4 years. I am his legal guardian. At first I hired live in caregivers who received free rent to keep an eye on him. But when the caregivers did not work out and his needs increased I moved in last year.
    I charge him rent, I own the house. But now I am spending almost all my time making sure his needs are met. I want to get paid a reasonable amount for taking care of him. He has the money.
    Since I take care of his finances, is it a conflict to pay myself and is it legal Can I charge him just once a year in a lump sum or do I need to pay myself more often??
    Or could I set up a trust fund and gift a lump sum every year and avoid taxes, unemployment, workman's comp etc.??
  • I'm researching a charity and am looking at its 2013 audited

    I'm researching a charity and am looking at its 2013 audited financials. I'm wondering what this means? Was an error found? Does this require the charity to file an amended 990?
    "Net assets at January 1, 2013 have been increased, reflecting an adjustment to correct the recognition of grants payable. The impact of this restatement on opening assets is as follows:
    Net assets 1/1/2013 previously reported: $1,410,287
    Adjustment to reduce grants payable: $2,507,655
    Net assets at 1/1/13 as restated: $3,917,942
    Does this mean that $2,507,655 in grants previously reported paid, were actually not paid out?
< Last | Next >
View More Finance Questions