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American Capital Agency Corp. Message Board

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  • mikeinfwtx mikeinfwtx Jan 7, 2013 4:47 PM Flag

    AGNCP - What are the disadvantages?

    When they call it, do you get $25/share or do you get the market price?

    Also, If AGNCP cuts it's DIV then AGNC's DIV=0 which means they are making zero, since they have to pay out 95%

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    • You get par value which is always $25 for preferred stock ... just the way the industry does it. Also, there is more than one kind of preferred stock. I don't own this one, but some preferred pays a cumulative dividend; that is, if they miss some payments, they catch up on them before paying any common divies. Some preferred pay a non-cumulative dividend; that is, each quarter is looked at on its own ... there is no catch up required. Oh, and just because it is callable by the company doesn't mean it will be. Preferred has a longer duration - which varies between them - at which point it will be redeemed at par if it's still out there. The call feature is optional at the company's discretion.

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