Strategy Proposes Preferred Stock Dividends Accrue Every Day of the Year
(7 days ago) · 1 source · Summarized by CryptoBipto
Strategy, the company formerly known as MicroStrategy, has proposed that dividends on its preferred stock accrue on a 365-day basis rather than the more conventional 360-day calculation. The change would affect how dividend payments are calculated for holders of the company's preferred shares.
WHY IT MATTERS
When a company issues preferred stock, it typically promises to pay regular dividends to shareholders, similar to how a bank pays interest on a savings account. The way those dividends add up day by day depends on how many days the company counts in a year. Some companies use a 360-day year, which is an old banking convention, while others use the actual 365-day calendar year. Think of it like this: if you are splitting a pizza into 360 slices versus 365 slices, each slice is a slightly different size even though the whole pizza is the same. Strategy wants to use the 365-slice method. This matters in the crypto world because Strategy is one of the largest corporate holders of Bitcoin, and the way it structures its stock offerings can influence how it raises money to fund further Bitcoin purchases.
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