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Understanding Convertible Preferred Shares

While buying stocks always poses the risk of losing money, avoiding stocks altogether means missing out on the opportunity to make good profits. There is one type of security, however, that may help solve this dilemma for some investors – convertible preferred shares give the assurance of a fixed rate of return plus the opportunity for capital appreciation. In this

Why Would a Company Issue Preferred Shares Instead of Common Shares?

There are several ways companies can raise funds to finance upcoming projects, expansion, and other high costs associated with the operation, the most common, including debt and equity issues. Large corporations can choose which kinds of issues they offer to the public, and they base that decision on the type of relationship they want with shareholders, the cost

How Does Preferred Stock Work?

Within the vast spectrum of financial instruments, preferred stocks (or “preferreds”) occupy a unique place. Because of their characteristics, they straddle the line between stocks and bonds. Technically, they are equity securities, but they share many characteristics with debt instruments. Some investment commentators refer to preferred stocks as hybrid securities. In this article, we provide a thorough overview of

Preferred Stock

What is a Preferred Stock? The term “stock” refers to ownership or equity in a firm. There are two types of equity – common stock  and preferred stock. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders. The details of each preferred stock depend on the issue. What Is The Difference Between Preferred Stock

Ways to Be Mortgage-Free Faster

Some mortgage borrowers have only two things in mind: “How much can I afford?” and “What will my monthly payments be?” They max out their finances on mortgage debt and use an interest-only or negative amortization mortgage to minimize their monthly payments. Then, they rely upon home price appreciation to eclipse the risks associated with a constant or increasing mortgage

Goodwill vs. Other Intangible Assets: What’s the Difference?

Goodwill vs. Other Intangible Assets: An Overview One of the concepts that can give non-accounting (and even some accounting) business folk a fit is the distinction between goodwill and other intangible assets in a company’s financial statements. Perhaps the confusion is to be expected. After all, goodwill denotes the value of certain non-monetary, non-physical resources of the business,

Explaining Amortization in the Balance Sheet

A few years ago, in a rather significant fashion, the U.S. Bureau of Economic Analysis announced a change to the way it estimates gross domestic product (GDP). Going forward, it was going to include a non-physical or intangible asset, research, and development (R&D) in its calculations of investments in the economy. The change boosted economic growth several basis points over the

Amortization

What is Amortization? Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time. The term “amortization” can refer to two situations. First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loan,