Year 1 - buyers because they don’t get the voting rights,...

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Year 1 Year 2 Year 3 Amount Distributed $50,000 $90,000 $130,000 Preferred Dividend (30,000) ($100) 30,000 30,000 30,000 Common Dividend (100,000) ($50) 20,000 60,000 100,000 Dividends Per Share Preferred Stock 1.00 1.00 1.00 Common Stock 0.20 0.60 1.00 Memo: TO: WOW Owners FROM: Chief Financial Officer Subject: Offering Preferred Stocks I am writing you this memo to inform you on my opinion on offering, and not offering preferred stock to aid in your expansion project. Unfortunately offering preferred stocks might not be very attractive to
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Unformatted text preview: buyers because they don’t get the voting rights, have tax implications, and don’t appreciate the same way as common stocks. However, to some people preferred stocks might be a sound investment because they get dividends before the common stock holders, and in the event of bankruptcy they have first priority of the assets. Not to mention, you are not obligated to give dividends to begin with. If there is enough interest in the stock then offering it might be a good idea for WOW Inc....
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This note was uploaded on 04/27/2008 for the course ACG 2021 taught by Professor Cobb during the Spring '08 term at Saint Petersburg.

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