Preferred shares

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Preferred shares

Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
These preferred shares are expected to be listed on the PSE on June 25.
USD 0.2375 per share on paid-up Class B Preferred Shares Series 31;
collectively acted as Brazilian underwriters with respect to the sale of preferred shares in the public offering with restricted placement efforts in Brazil.
The Series S Preferred Shares will continue to pay a monthly floating adjustable cash dividend for the five-year period beginning on November 1, 2016, as and when declared by the Board of Directors of BCE.
The company utilised the present cash balances to fund the redemption of the Preferred Shares, which totalled USD15,186,987.
Although the banking group had earlier planned to repay the funds by the deadline Saturday, it had decided to postpone the repayment because repurchasing preferred shares based on the current slumping stock price would cause a loss for the government, according to industry observers.
The $250 million of preferred shares Axis now says it will sell are 7.50% Series B shares with a liquidation preference of $100 a share.
The preferred shares are rated Pfd-3 (High) by Dominion Bond Rating Service (DBRS) and P-3 (High) by Standard and Poor's (S&P).
In either case, the preferred share issuer would forgo interest deductions in exchange for a reduced "interest rate" paid in the form of a fixed return on preferred shares.
Equity REIT shares have outperformed the broader market this year, and REITs continue to attract investors through a variety of avenues, including the lesser known option of perpetual preferred shares. What are these half-bond, half-stock vehicles and how are they impacting the capital flows to public companies?
Simply put, preferred shares are a hybrid security offered by companies large and small, something of a cross between bonds and common stock.

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