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What is preferred stock and why is the US Government buying it as part of the bailout plan? |
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Unlike common stock, preferred stock can be converted to bonds at the discretion of the owner.
The government, by buying preferred stock, gets the rapid growth of stock with the safety of bonds.
If there is any money left over after bankruptcy, bond holders are paid first. If there is any money left, after that, common stockholders are paid.
First answer by ID2776813694. Last edit by ID1216417123. Question popularity: 12 [recommend question]
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What is preferred stock and why is the US government using it in the bailout plan?
