What is guaranteed shares?

guaranteed shares is a term used in the financial industry to describe shares that are supported by a third party. This third party concludes a contract with the investor and guarantees that shares will be paid in the form of dividends. It is not common for corporations to issue guaranteed shares and in most cases these shares are only offered in the railway and public sectors. Guaranteed shares offered by general corporations are guaranteed only in very specific circumstances. Guaranteed shares are often compared with guaranteed bonds because they are set in a similar way.

When a corporation decides to issue shares, it basically has two categories of shares from which you can choose. The Company may issue preferred shares or can issue a ordinary share. For the investor, each type of stock has its own unique set of risks and rewards. One of the main differences in both is how the shares will be paid. Unlike investors who are issued by ordinary shares, investors who issue preferred shares are fromAruized dividends and will always be paid first, even if there is financial problems such as bankruptcy companies.

On the other hand, guaranteed shares come with certainty that the dividend will be paid in full by a third party that supports the transaction, regardless of whether the stock is classified as preferred or common. The issuance of guaranteed shares is quite unusual, but when this happens, it is usually found in the financing of railways and company companies. The guaranteed shares are issued by a railway when one railway forms a contract with another for renting assets. As part of the agreement, the railway leasing property will guarantee the payment of the investor's dividends on the shares of other railways.

On a much smaller scale, small corporations that are associated with larger corporations can issue a GuaranTeed Stock as a way to raise the price of their shares. In these cases there will be a larger company guaranteeIT shares for investors, which will facilitate less corporation to secure funds and increase its value. Some people occasionally incorrectly interpret preferred stocks to make them the same as guaranteed shares. This is not the case and the main difference between the two is that the preferred dividends of shares rely on the company's ability to pay money and guaranteed shares will be paid regardless of the company's ability to pay.