Preferred Stock: Usage And Characteristics

Abstract

This study was conducted to determine the purposes for which corporations issued preferred stock and the types of characteristics attached to those issues. One hundred sixty-eight currently outstanding industrial preferred stock issues were researched. The most frequently given reasons for issuing preferred stock were to finance acquisitions and mergers, to reduce corporate debt, and for employee stock option plans. The majority of the preferred stocks studied were nonparticipating, cumulative, preferred over common as to assets, callable, convertible, and had voting rights.