preferred stock

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Related to preferred stock: Convertible preferred stock

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 ?
Finally, since Congress intended to require gain recognition only where a taxpayer is exchanging risky instruments for more secure instruments, gain recognition is not required under section 354, 355, or 356 under the following circumstances: (1) certain exchanges of preferred stock for comparable preferred stock of the same or lesser value;(4) (2) an exchange of preferred stock for common stock; and (3) certain exchanges of debt securities for preferred stock of same or lesser value.
None of the newly issued regulations shed any light on some important issues surrounding nonqualified preferred stock and how that stock will be treated by other sections of the Code.
Study legislation to target abusive freeze transactions such as manipulation of investment instruments, lapsing rights, unrealistic buy-sell agreements and valuation of preferred stock upon a subsequent gift of the preferred stock, or death of the preferred stockholder, inconsistent with the valuation of the preferred stock at the time of the freeze.
The employer may redeem the preferred stock with cash or common stock at a price equal to the initial value of the preferred stock.
3689 per share representing the dividend payment originally due November 15, 2006, was declared on the outstanding Series C Preferred Stock, payable February 15, 2007, to shareholders of record at the close of business on February 5, 2007.
The company may, in the future, purchase additional shares of its preferred stock, although the company and its affiliates are prohibited from purchasing shares until at least ten business days after December 19, 2006.
The Preferred Stock called for redemption is convertible until the close of business (5:00 p.
The general expectation of stable dividends for a preferred stock or comparable hybrid means that the volatility should be much lower than that of common stock, except in the circumstance when the issuer approaches insolvency.
As a condition to the closing of the Preferred Stock Transaction, Viking has completed a conversion of certain outstanding Convertible Notes in the aggregate principal amount of $4,750,000.
Prior to the Redemption Date, holders of Series A Preferred Stock may elect to convert such shares into shares of Patapsco Bancorp, Inc.
The financial restructuring had two components: a May 2002 extinguishment of certain junior debt (the "May 2002 Exchange Transaction"); followed by a November 2002 exchange of Series C Preferred Stock and redeemable common stock purchase warrants for its Series A and Series B Preferred Stock, warrants for the purchase of shares of Series B Preferred Stock, common stock warrants and shares of its common stock (the "November 2002 Exchange Transaction").

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