preferred stock

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Preferred stock

A security that shows ownership in a corporation and gives the holder a claim, prior to the claim of common stockholders, on earnings and also generally on assets in the event of liquidation. Most preferred stock pays a fixed dividend that is paid prior to the common stock dividend, stated in a dollar amount or as a percentage of par value. This stock does not usually carry voting rights. Preferred stock has characteristics of both common stock and debt.

Preferred Stock

Stock in a publicly-traded company without voting rights, but otherwise with more rights than common shares. Preferred stocks receive dividends before common shares and sometimes have guaranteed dividends, while common shares only receive the leftovers. Preferred stocks also have a prior claim on capital in the event of liquidation; if the company is liquidated, all preferred shareholders must be paid off before a single common shareholder. Some preferred stocks are convertible, which means they can be changed into common shares at a certain ratio so that even preferred shareholders without voting rights have the possibility of gaining them. Preferred stocks tend not to appreciate as fast as common stocks.

preferred stock

A security that shows ownership in a corporation and that gives the holder a claim prior to the claim of common stockholders on earnings and also generally on assets in the event of liquidation. Most preferred stock issues pay a fixed dividend set at the time of issuance, stated in a dollar amount or as a percentage of par value. Because no maturity date is stipulated, these securities are priced on dividend yield and trade much like long-term corporate bonds. As a general rule, preferred stock has limited appeal for individual investors. See also auction-rate preferred stock, callable preferred stock, cumulative, floating-rate preferred stock, Monthly Income Preferred Securities, new money preferred, participating, preferred dividend coverage, prior preferred, remarketed preferred stock, second preferred.

Preferred stock.

Some corporations issue preferred as well as common stock.

Preferred stock can be an attractive investment because it typically pays a fixed dividend on a regular schedule. The share prices also tend to be less volatile than the prices of common stock.

In fact, preferred stock prices tend to move with changing interest rates in the same way that bond prices do. That's one reason this type of stock is sometimes described as a hybrid investment because it shares some characteristics with common stock and some with fixed-income securities.

What preferred stock doesn't generally offer is the right to vote on corporate matters or the opportunity to share in the corporation's potential for increased profits in the form of increased share prices and dividend payments.

Convertible preferred shares can be exchanged for a specific number of common shares of the issuing company at an agreed-upon price. The process is similar to the way that a convertible bond can be exchanged for common stock.

preferred stock


preferred stock

References in periodicals archive ?
Together the supervoting rights, and the combined Chairman and CEO roles give John Casella undue influence over the Company, ensure his longevity despite chronic failures, and drive deep misalignment between his interests on the one hand and those of the public shareholders on the other.
In January, we simplified our capital structure, through the capital stock restructuring, eliminating supervoting shares.
02 per share of Common Stock and Supervoting Common Stock which will be paid on December 31, 2000.
The repurchase and exchange transactions eliminated all outstanding shares of the Company's supervoting Class B Capital Stock.
Franklin Mutual Advisers, LLC, (FMA) the advisor to the Mutual Series Funds (Mutual Series), the largest shareholder of Potlatch Corporation (NYSE:PCH), announced today that it enthusiastically supports and intends to vote in favor of the company's proposal to amend its charter to eliminate "time-phased" supervoting shares.
33) Consolidated Balance Sheets Data: As at December 31, As at June 30, 2002 2003 Rmb'000 Rmb'000 US$'000 (2) (audited) (unaudited) (unaudited) Total assets 2,880,680 2,533,082 305,928 Shareholders' equity 535,206 540,077 65,227 Supervoting common stock - par value US$0.