European Stars And Stripes (Newspaper) - March 8, 1987, Darmstadt, Hesse Page 20 the stars and stripes sunday March 8,1987 investor s guide q. In my tank or higher in come i re a mid in str net Deal boat Glennie my. Livy we Mortati font Etc. Boil Seldom a word boat preferred Stock Muir of which hire Yamdi of 9 it Rcpt at higher a bin it safety Abdai to tsp . Far out mud of a had tin will. Chr to accept be fixed a mend. Are Here other reasons for Rol in vesting in Elul seems to be an Ideal income vehicle a. Sure. Even though the Points you make Are valid they Don t necessarily result in preferred stocks being Ideal Tor All investors. Preferred Stock is senior to com Mon Slock of the same company be Doyle cause dividends must be paid on the preferred before dividends can be paid on the common. Also in he unlikely event that the company is liquidated the preferred must be paid off before the common. Most preferred stocks do have fixed dividends that never change. The exceptions Ait he relatively rare participating re referred on which dividends Are raised when corporate profits increase and variable rate or adjustable rate preferred on which dividends move up find Down in line with interest Rales in the marketplace. The Market values of straight pc ferrets paying fixed dividends move in the opposite direction of interest Rales up when interest rates fall and Down when interest rates Rise. As investments that makes pc feeds somewhat similar to Bonds with one mighty big exception. Every Bond has a maturity Date at which time the issuer pledges to fared stocks do not have maturities and can remain outstanding forever. When you own a Bond you know the Price you will get when the Bond matures unless the issuer de faults. The Only Way you can be sure of gelling Money for a preferred Stock is by Selling it for whatever Price in brings in the marketplace. Nonetheless preferred do have High yields and do Appeal to investors seeking income. Just be sure you understand the risks involved. Q. I was Strid hit preferred stocks Are better Ifrat Madts for corporations than for individuals. Why a. Because of lax considerations. When one company owns Stock in another company it gels an 80 percent dividends received credit and has to pay Federal in come tax an Only 20 percent of the dividends it collects. Before this year that credit was 85 percent. Let s say Xyz corp. Owns Stock in hrs corp. And gets $ 100,000 in dividends. Xyz pays tax on Only 120,000 of those dividends. This Rule applies to dividends from common Stock As Welt As preferred Slock. However because dividends on most preferred Slock Are fixed they provide a More predictable source of income and corporate lax shelter. One added note when. One company owns 80 percent or More of another company s Stock it is allowed to deduct 100 percent of the dividends it receives from ils taxable income. Dow advances 56.24 Points indexes reach record Hichs to Ellen Freisch up Bat tues writer new York the Stock Market ended mixed Friday As some investors cashed in on recent gains but the Dow Jones Industrial avenge and Many other major Markei indexes edged up to record highs. Trading was Active. The Dow industrials Rose 3.80 to a record 2280,23. For the week the Dow advanced s6.24 Points losers outnumbered gainers 855-696 among the 1,974 issues crossing the new York Stock Exchange tape. Other Market indexes tapped records set a Day earlier. The new York Slock Exchange composite Index Rose 0.04 to 16s.45. Standard & poor s 500-Jtock Index climbed 0.14 to 290.66. The Price of an average share climbed i cent prices on the american Stock Exchange and Over the counter also climbed to record Levels. Traders said a weak Bond Market gave equity investors a Chance to Lake some profits. Rising Oil prices and news of a Muger than exp Eclea gain in february employment sent the . Trea sury s bellwether 30-year Bond Down a Little More than three fourths of a Point or a bit More than 7,50 for every $1,000 of face value Bui analysts said losses due to profit taking Are Likely to remain modest at this stage. While the Market posted some losses there arc still oceans of Money from foreign investors and from Rentto cation of a facts in institutional portfolios ready to come into the Markei any Lime prices drop off said Montr Gor Don research director at Dreyfus corp. Foreign Money is entering this mar Ket in abundance said Alan Acker Man of Herzfeld it Stem. Ackerman said japanese investors Are most attracted to Blue Chip stocks while the europeans Are interested in both High Quality and secondary issues. Near term the Markei won t give much ground Ackerman said. We re seeing Good solid strength in secondary stocks without too much speculative but he added thai any Markei that has moved up this fast is Vul Era Gordon said profit taking could eventually cause a decline of Between 10 percent and 12 percent of the mar kers value but added that a correction of Between 15 percent and 20 per cent will not materialize unless there is a change in the Outlook for interest rates or inflation. Big Board volume amounted to about 181.590,000, Down from 205,430,000 thursday. Nationwide turnover in nose Lis cd issues including trades in stocks on re Stock pulse my a a Trade w 4j03, la 44�� _4h and Cint Toh Mumm w cd Ctm it Vul cml 17 1 7-0aii end 81.800 j1karm to m.700 91hnext j4s Huu Roi 3hjoi to 13 Ert Trumm 113.7w 14k Oil to jmj 3k 0.71 Euh hoi Oft him int p�1w t7ft -"4 of in to " 4 14.0i � Vas its 03 i in 4.w my u 1bx t 9� he shit iij1 Uin u 74114.0 it he Ftp 4j1 1 17 9h .45 7.0 21h i s4�i t n 1h� t in 21 � Zoh 0�t �.0 181 t to i 94ait t Tell no my 1j Norm i will tonal exchanges and Over the counter totalled 214,832,2 0 shares compared with 238,452,280 in the previous ses Sion. On the dig Board Revlon group was the most Active nose listed Issue Ris ing 3 i to Isy. Macandrews and Forbes holdings controlled by Revlon chairman Ronald Perelman said it is considering making an bid for All the common Stock of Revlon it does not already own. Pan am followed Down a to 44i. Us air was third climbing 2% to 51w. Trans world airlines said Friday that has raised its slake in us air croup to about 15 percent As part of Twa chairman caril Cahn s if. 5 Bil lion hostile bid for the Carrier. Tall broadcasting shot up 19 to i5i after getting a tl45 a share take Over offer from Narragansett capital and tall vice chairman Dudley Tad among Blue chips at to fell u to 23tt and american express jumped m to sow. General motor skidded it to 77ft. Ford climbed i % to 81, Bethlehem steel fell it to 7 on talk that it is mulling the implications of a potential bankruptcy filing. Hughes toot gained in to i2k. On thursday it called off its proposed merger with Baker International. Profit talking bit some semiconductor Miles. Texas instruments fell 2 a to 167 a and National semiconductor slipped % to invt. Investors also cashed in on advances in the pharmaceutical group. Upjohn fell 3m to 146v and Carter Wallace Tost 2v.tol23 a. Prices edged higher on the american Slock Exchange. The american Slock Exchange mar Ket value Index Rose 0.10 to 329.57, its fourth record this week. The Price of an average share added i cent. Gainers outpaced losers 315-268 among the 840 issues traded. Composite volume total de 17,614,120, compared with 21,400,900 shares traded thursday. 1ch corp. Led the amex actives fall ing 3% to 17ft. Fruit of the loom Fol Lowed easing i to 9u. Ecology & environment was third losing u to 21 %. The National association of Securi ties dealers Index of oct stocks Rose 0.47 to a record 429.47. Fund Price from Page 19 m t o huh 870 7.s i7.u30.49 1770 1m411.10 iu1 Gratto eur a Fly Lull vow Iua 14.0it.e in 17.111kn 1won4 144 my 11wn.l ii my. 91. Atuna g0 e f 1701 r spilt i Tel b i 1441n l suck r iu4 m a 1441n l. Of Dpi u9h4 he � 14.14 ctr 9 to Mil 1123 tint h.15hmsffi As Foffi to n an 2117 fora 17.71 in 41- i4.jo 18.07 �.4muo17.01ui tutn.1. U3n.l 1.mnj. 19 3f Kun to 179 mull Blu Sec us pm 17.71 i. 10jhiu 127 to. 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