If WMI receives "x" dollars, is there a somewhat static formula for determining the amount of money that will go to each of the preferred stocks?
My dilemma is this: I have a friend who is heavy into WaMu common stock, telling me that my play with Ks (I'm heavy in Ks) isn't going to be as profitable as the commons. He's telling me that the share price now will probably be a 10x-bagger once this all settles out, and I just can't see how that would happen if the preferred shares are going to be paid out first.
Will ALL shares receive a sum of money or does each one have an order of precedence? It was always my understanding that preferred shares are just that - preferred by investors because they are paid before commons are if the company goes under.
Also, a while back some conversations were going on about a sort of "back pay" for all the dividends and interest that shareholders were supposed to receive while being shareholders of the preferred stocks. While possible, I believe it to be improbable that they will try to "back pay" shareholders for the dividends they should have received. (IMO, of course. Thoughts?)
