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Matching Interest Rates to Cash Flows

Preferential treatment regarding payment of dividends

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Unformatted text preview: can withdraw the Interest earned at the end of each period (A = PV*r), leaving the amount originally invested (PV) in the bank. Aside: Preferred Stock Preferred Stock – Typically no voting rights. - Unless corporation has not paid preferred dividends for some time. – Preferential treatment regarding payment of dividends and in case of liquidation (relative to common stock). – Fixed ­Rate Preferred Stock pays a fixed cash dividend each period. Preferred Stock is ofte...
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