Monthly Income Preferred Securities - MIPS

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DEFINITION of 'Monthly Income Preferred Securities - MIPS'

Shares that are an interest in a limited partnership existing solely for the purpose of issuing preferred securities and lending the proceeds of the sales to its parent company. MIPS usually have a $25 par value, NYSE listing and cumulative monthly distributions.

INVESTOPEDIA EXPLAINS 'Monthly Income Preferred Securities - MIPS'

MIPS are hybrid securities, combining features of preferred stock and corporate bonds. Hybrids can pay a higher rate of return than preferred stock because dividends are paid with pretax dollars, generating a sizable tax break for corporations.

RELATED TERMS
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  4. Return On Equity - ROE

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RELATED FAQS
  1. What is the difference between preferred stock and common stock?

    Preferred and common stocks are different in two key aspects. First, preferred stockholders have a greater claim to a company's ... Read Full Answer >>
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