preferred stock

Preferred Stock

A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders. Preferred stock does not usually have voting rights.

Notes:

Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation.

See also: Callable Preferred Stock, Common Stock, Convertible Preferred Stock, Dividend, Participating Preferred Stock, Prior-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.

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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 (MIPS), new money preferred, participating, preferred dividend coverage, prior preferred, remarketed preferred stock, second preferred.