RE:RE:RE:RE:RE:Preferred Bsholybaba wrote: Thanks rustyblades, so if it goes above $25.10, and lets say the prime is at 3% the rate would be 2.4%of $25 = .625 ,so the best scenerio is to have the share price stay below $25 and the prime go up otherwise if it goes beyound $25 anything over 5% prime doesn"t matter since the most it will pay out is 4%(80% of 5 being 4) div will max out at $1, below $25 at 5% would be provide a div of $1.25, is that how you read it.
Baba
There is no cap on the rate it will pay. The 4% refers only to the monthly adjustment to the fraction of the Prime Rate.
Let's assume the pref B trades above $25.10 ( I think that's the weighted average for the month). For the first month this happens, the rate paid will be 100% - 4% = 96% of the prime rate. For the second month it will pay 96% - 4% = 92% of the prime and so on until it reaches the limit of the ratchet which is 60% of the prime. The 60% is from memory so best to check the actual info on the site recommended by Pierre.
If the prime goes to 7.5%, as an example, and the pref B is still paying 100% of the prime then the pref B would pay .075 x $25
I for one wouldn't mind the lower rate due to its trading above $25.10 :))