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Preferred shares are an asset class somewhere between common stocks and bonds, so they can offer companies and their investors the best of both worlds. Companies can get more funding with preferred shares because some investors want more consistent dividends and stronger bankruptcy protections than common shares offer.
By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
A reduction of share capital allows a company to reduce its issued capital without the need for each individual shareholders consent. Another commonly used method by which a company can reduce its share capital is where the company repurchases its own shares from its shareholders. This is known as a share buy-back.
The most common issuers of preferred stocks are banks, insurance companies, utilities and real estate investment trusts, or REITs. Companies issuing preferreds may have more than one offering for you to vet. Often you may find several different offerings of preferreds from the same issuer but with different yields.
Yes, a company can change the number of authorized shares it is allowed to issue. Public companies must often notify existing shareholders and call for a shareholder vote. The measure is then often reviewed at the following shareholder meeting.

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Shares can be diluted through a conversion by holders of optionable securities, secondary offerings to raise additional capital, or offering new shares in exchange for acquisitions or services.
Expensive Way to Finance Because preferred shares have known disadvantages for investors, companies almost always offer high interest rates to sell them.
If a company does well, or the value of its assets increases, common stock can go up in value. On the other hand, if a company is doing poorly, a common stock can decrease in value.
Another reason a company might not want to issue all of its authorized shares is to maintain a controlling interest in the company and prevent the possibility of a hostile takeover.
Like bonds, preferred shares make cash payouts, often at a higher yield than bonds, while offering higher dividend returns and less risk than common stock. The features of preferred stock provide investors with certain benefits, but also come with caveats that potential buyers need to be aware of.

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