The 200-Year-Old Secret: Why Preferred Stock Is The Ultimate Fixed Income Hybrid

2025-12-21 10:15:00 ET

Co-authored with Beyond Saving.

Preferred shares have been around for over 200 years. In 1878, the Pennsylvania Railroad Company issued perpetual preferreds at a 6% coupon, to raise capital without diluting its shareholders, and without taking on any more debt. By the early 20th century, it became common for public utility and infrastructure companies to use preferred shares to raise capital. Since the 1970s, banks and insurance companies have been using preferred securities to raise capital without affecting their capitalization profiles....

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