Preferred Stock Financing: A Survey Of Trends In The 1980s

Abstract

Following major structural changes in the preferred stock market, a survey was undertaken to determine whether reasons for issuing preferred stock had changed and for what purposes it is now issued. Differences in uses between traditional and new preferred stock are documented. No support is found for the common generalization that convertible preferred stock is issued primarily for merger and acquisition activities. Reasons for issuing preferred stock vary by industry and whether the firm is expanding or restructuring.