Tuesday, February 15, 2011

Ford's (NYSE:F) Convertible Preferred Stock Shares Called

Shares of Ford (NYSE:F) convertible preferred stock have been called, and as of March 15, the automaker will redeem the share at close to $50.87 each.

This is reference to convertible preferreds, meaning shareholders are given the option of converting each preferred share into 2.8769 shares of Ford’s common stock.

Working from Friday's close of $16.38, that would value the shares at about $47.12. In contrast, the preferreds closed Friday at $51.03.

The bottom line for income investors is the conversion to common shares of Ford does little, and so they'll have to go somewhere else to get their quarterly dividend payout they have been enjoying from Ford.

Based on a par value of $50, the shares had been yielding 6.5 percent.

Ford was trading at $16.08, down $0.01, or 0.09 percent, as of 1:18 PM EST.

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