Guaranteed Stock

Guaranteed stock is a type of equity security that provides the holder with a fixed dividend payment. The dividend is typically paid quarterly, and it is guaranteed by the issuing company. This means that the company is legally obligated to make the dividend payments, even if it is experiencing financial difficulties.

Guaranteed stock can be a good investment for investors who are looking for a safe and reliable source of income. However, it is important to note that the dividend payments are not guaranteed to increase over time. In fact, they may even decrease if the company's financial performance deteriorates.

There are two main types of guaranteed stock: participating and non-participating. Participating guaranteed stock entitles the holder to share in any future increases in the company's earnings. Non-participating guaranteed stock does not provide this benefit.

Guaranteed stock can be issued by both public and private companies. However, it is more common among private companies, as they are often smaller and have less access to capital.

Guaranteed stock can be a valuable tool for companies that want to raise capital without diluting their ownership. However, it is important to understand the risks involved before investing in this type of security.