Bond investors have a good thing
going for them. They finance part of a company's operations in exchange
for a return of capital at a later date and pocket steady interest
payments along the way.
True, they miss out on any growth the company might have, but for the most part they're exposed to minimal risk.
But what if you could have both an equity position and receive a high yield as well?
Enter the master limited partnership (MLP). This asset class behaves
much like common stocks do; they're highly liquid, and as a shareholder,
you benefit from the growth of the company. The secret to the appeal of
MLPs lies in the tax treatment. Unlike a standard corporation, MLPs
aren't required to pay any taxes; instead they pass it on to unit
holders. (more)
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