RE:Can anyone explain how this stock can payThe simple answer is, over the long term it can't. Every single one of these split funds eventually head to a NAV of $15. Once it gets below the $15 barrier it stops paying the common shares so they have the funds to start increasing the NAV back over the $15.
A few years ago FTN was wallowing well below the $15 threshold with little chance of getting over it in the foreseeable future They devalued the commons by 40% and reduced the share count accordingly in order to bring the NAV back to over $22. Looks good noe that they did this but one has to remember the common shareholders lost 40% of the investment.
Now FTN is well below the consolidated $22 NAV and is slowly heading down to $15.
The big answer is, yes, the 19% dividend looks good, but over the long term, in can be a big loser. Much better off in the lower dividend preferred shares as they just keep on paying.