Aren't you forgetting something?
PFD Holdings, LLC was buying dollar bills for far less than a dollar.
An 8 percent rate on a $25 par preferred stock produces $2.00 in annual dividends. If an investor paid $8.33 per share, the cash rate of return would be 24 percent per year ($2.00/$8.33).
In my case, if the all of the dividends are paid, it would represent nearly twice my cost. I would still be owed par.
PFD Holdings, LLC is no different.
"Someone said it takes 30 years to be an instant success" - Gabriel Barbier-Mueller, CEO of Harwood International