Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84236
Authors: 
Apreda, Rodolfo
Year of Publication: 
2004
Series/Report no.: 
Serie Documentos de Trabajo, Universidad del CEMA: Área: finanzas 260
Abstract: 
This paper sets out a proposal by which two distinctive and new types of preferred stock (one- and two-tiered convertibles) could be used to sharpen up a company's governance. Firstly, the framework of analysis for standard preferreds will be outlined, mainly their valuation, underlying incremental cash flows, control rights and contractual features. Secondly, one - and two - tiered convertible preferred are introduced, setting up their financial design, how they convey control rights and contractual characteristics, and giving heed to a simple valuation for those preferreds. Last of all, it will be shown how the one- and twotiered convertibles come in handy to deal with some particular governance topics: capital structure, debt refinancing and compensation schemes for management.
Subjects: 
preferred stock
convertible preferred stock
corporate governance
control rights
compensation scheme
JEL: 
G34
G11
G10
Document Type: 
Working Paper

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