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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. The stock shares characteristics of both common stock and debt.

• The third major source of long-term financing for corporations that broadens the firm's capital structure, raising financing without giving up ownership or incurring obligations. Preferred shares get their name because they have some form of superior preference to either or both earnings and assets upon corporate dissolution that is superior to (preferred) the common share class. Preferred shares usually carry a stated value, a fixed dividend and a cumulative feature in addition to the aforementioned preferences.

• A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders. Preferred shareholders have a claim, prior to common stockholders, on earnings and assets in the event of liquidation. Preferred stock does not usually have voting rights.

• This is similar to common stock, however, it pays a fixed preferred dividend similar to debt. They maybe cumulative or noncumulative. Also, the maturity may be fixed or perpetual.

• Is an equity security which has a priority relative to ordinary common shares for dividends and return of par amount in the event of a corporate dissolution. Often, preferred shares are nonvoting equity interests. However, a default in the payment of that issue's preferred dividend or other covenant breach may temporarily give the preferred holders voting powers. Preferred shares can have convertible, cumulative, participating, voting, or other special features.

 
 

Follow this link for all the terms related to stock.

 
 Embedded terms in definition
 Assets
Capital structure
Capital
Carry
Class
Common shares
Common stock
Convertible
Corporation
Cumulative feature
Debt
Default
Dividends
Dividend
Earnings
Equity
Event
Liquidation
Maturity
Par value
Par
Preferred shares
Return
Rights
Security
Shareholders
Shares
Share
Stated value
Stock dividend
Stock
Voting rights
Voting right
Without
 
 Related Terms
 
Acquisition of stock
Adjustable rate or floating rate preferred share arps
Adjustable rate preferred stock
American stock exchange
Auction rate preferred stock
Authorized stock
Blue chip stock
Call price preferred
Capital stock
Common stock
Common stock equivalent
Common stock market
Common stock ratios
Conversion or stock value
Convertible exchangeable preferred stock
Convertible preferred
Convertible preferred shares
Convertible preferred stock
Cost of a new issue of common stock
Cost of preferred stock
Cumulative preferred
Cumulative preferred stock
Cyclical stock
Direct purchase stock
Direct stock purchase programs
Diversified common stock fund
Dutch auction preferred shares
Employee stock fund
Employee stock ownership plan
Exchange of stock
Floating rate preferred
Growth stock
Income stock
Intrinsic value common stock
Letter stock
Market segmentation theory or preferred habitat theory
Monthly income preferred security
New york stock exchange
Non cumulative preferred stock
Noncumulative preferred stock
Nonparticipating preferred stock
Participating preferred stock
Philadelphia stock exchange
Preference stock
Preferred dividends
Preferred equity ratio
Preferred equity redemption stock
Preferred habitat theory
Preferred shares
Preferred stock agreement
Privately owned stock
Repurchase of stock
Reverse stock split
Safety stock
Small ordinary stock dividend
Stock
Stock dividend
Stock exchange
Stock index option
Stock market
Stock option
Stock purchase plans
Stock purchase warrant
Stock quote
Stock replacement strategy
Stock repurchase
Stock selection
Stock split
Stock swap transaction
Stock symbol
Stock ticker
Straight preferred shares
Treasury stock

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