Equity Securities: Rapid Fire

What this video covers

• The exact liquidation priority: secured debt, unsecured debt, subordinated debt, preferred equity, then common equity as the residual owner
• Why cumulative voting benefits minority shareholders while statutory voting favors majority holders, and how to calculate votes in each system
• Preferred stock as a hybrid: fixed dividend, priority over common, generally no voting rights, and bond-like sensitivity to interest rates
• How investor-friendly features (cumulative, participating, convertible) lower the dividend rate while issuer-friendly features (callable) raise it
• The conversion price formula for convertible preferred: par value divided by conversion ratio
• Why American Depositary Receipts (ADRs) trade and pay dividends in U.S. dollars but still retain full currency risk from the underlying foreign shares
• The distinction between sponsored ADRs (foreign company involvement, exchange listing, full voting) and unsponsored ADRs (bank-created, over-the-counter, limited voting)