A sinking fund is a poorly performing mutual fund whose net asset value is declining. A call provision allows the purchaser of a security to demand repayment of the principal. A bond callable at 105 means that a 5 percent call premium will be paid on the face value if the bond is ever called. Dual-class common stock can enable company founders or management to have voting control of the corporation. If you were a common shareholder with minority interests, you would prefer a majority-rule rather than a cumulative voting system.
Most preferred stocks have a noncumulative feature.
The book value and the market value of common stock are usually the same. The participating feature allows preferred shareholders to share in increasing dividends with the common shareholders. Used by permission. All rights reserved.