Preferred shares

Capital stock which provides a specific dividend that is Paid before any dividends are Paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Like common stock, Preferred shares represent partial ownership in a company, although Preferred stock shareholders do not enjoy any of the voting rights of common Stockholder. Also unlike common stock, a preferred Share pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main Benefit to owning preferred Share is that the investor has a greater Claim on the companyï¿½s assets than common Stockholder. Preferred shareholders always receive their dividends first and, in the event the company goes Bankrupt, preferred shareholders are Paid off before common Stockholder. In general, there are four different types of preferred stock: Cumulative preferred, non-cumulative, participating, and Convertible. also called preferred stock.

Related Terms: 24 Asset, Benefit, Bankrupt, Cumulative, Call, Convertible, Cumulative preferred, Claim, ECI, FIN, Heir, Liquid, Own, Preferred shares, Preferred stock, Paid, Quid, Right, Rent, Shareholder, Stockholder, Share, Type, Voting right

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