Why buffett have chosen to invest in the preferred stock

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Reference no: EM131305351

An article on investor Warren Buffett makes the following observation: During the financial crisis of last year, Mr. Buffett spent $14.5 billion to buy preferred shares of three blue-chip American companies: Wrigley, General Electric and Goldman Sachs.

These companies didn't get Mr. Buffett's seal of approval for free, however; the preferred stock carries hefty dividend payments.

Why might Buffett have chosen to invest in the preferred stock issued by these firms rather than their common stock?

Reference no: EM131305351

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