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Strategies & Market Trends : Dividend investing for retirement

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To: Woody_Nickels who wrote (15883)	5/30/2013 10:51:48 PM
From: Elroy	1 Recommendation Read Replies (3) of 34328

If the number of pf shares doubles there will be that much less for common share holders. No, that's not correct. If the preferred shares cost 7% per year no matter what, but the portfolio/capital earns 12% per year, that means 5% per year is left over for the common shareholders. When a company issues preferred shares the common isn't diluted. As long as the capital raised earns more than the cost of the preferred, it makes more money available for the common, not less. I've often wondered why the mREITs would ever issue regular equity (which costs them around 10%-15% in regular dividends each year) rather than preferred equity, which usually costs them around 6.5%-8%.

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