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Some of my friends recommend clenching and unclenching my buttocks during the exam. Personally, I prefer not to receive advice about my hindquarters during times of stress.

Taking Stock of the Situation with Preferred Stock

Dashboard > Chapter 4: Raising Debt - Securities > Taking Stock of the Situation with Preferred Stock

Taking Stock of the Situation with Preferred Stock

Bondage, Anyone? Raising Debt, Not Cain

With everyone uneasily comfortable with the equity portion of the IPO, the focus turns to the debt piece. The bankers delineate the choices:

The Sauce Company can raise debt in the form of preferred stock (which isn’t really debt—technically it is equity—but it pays a fixed dividend, which is similar to a fixed coupon on a bond), but it would have to come with conversion rights. Hal. E. Lujah! That is, it could be converted into common stock at a gi...

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