Quote:
Originally Posted by fotze
Where do preferred shares fit on that pyramid?
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Depends.
Preferred shares from a bank would be at (or near) the bottom as the risk of insolvency is low. This is also why the dividend rate is 5%.
Preferred shares from my start up company selling real estate in Detroit would be at the top, because I might get shot when I repo my next house project. My dividend rate is 80% though!
Higher risk=higher return.