OK, we all know that The Great Credit Crunch of 2007-?? had a grim effect on financial companies and an even more grim effect on their share prices. But, for preferred share investors, the important thing is: what was the effect on preferred shares of split-share corporations backed by financial issues?
The July, 2008, edition of Canadian Moneysaver includes my efforts to review the situation. Look for the research link!
And I can offer a bonus spreadsheet that includes a little information that couldn’t be squashed in to the article.
[…] Thus, income coverage is 4.838/(1.189 + 2.980) = 1.16:1. This is a good number. They can cover their expenses and preferred share distribution with sustainable income (assuming no cuts in dividend receipts), which is a Good Thing and not the case for all split-shares (see Split Shares and the Credit Crunch). […]