What is preferred stock? What are the advantages of issuing preferred stock by listed banks?

1. Supplementary core capital adequacy ratio. Preferred stocks are similar to open bonds, but they are not liabilities in the balance sheet, but belong to equity.

2. Compared with the free repayment schedule of bonds, preferred stocks can not pay dividends when the company's profits are not good, but the interest of bonds must be paid, and the principal must be paid when the bonds expire.

3. Preferred shares generally cannot be traded in the secondary market, and will not affect the stock price in the secondary market.

4. Preferred shares receive a fixed dividend, and the profits generated by the company are given priority distribution, but generally do not participate in the dividend distribution of common shares. If the dividend cost ratio of preferred shares is lower than the company's return on net assets, the extra capital investment income of preferred shares will enter the common shareholders' equity, and the common shareholders' equity will benefit from it. For example, the ROE is 65,438+05%, but the preferred stock only needs to pay dividends of 5%, and the extra 65,438+.

5. When a company files for bankruptcy, preferred shares have priority over common shares when distributing surplus value. 6. Preferred shareholders only enjoy fixed dividends. As long as listed companies pay dividends as promised, they can occupy funds indefinitely. Preferred shareholders have no voting rights and do not participate in the company's business activities.