What is a preferred stock?

Definition preferred stock

How do we define: preferred stock?


Preferred Stock is a type of stock that has characteristics of both common stock and fixed income securities. Preferred stock gives the holder ownership in a corporation and a claim, prior to the claim of common stockholders, on earnings and also generally on assets in the event of liquidation. Most preferred stocks provide a fixed dividend that is paid prior to the common stock. Preferred stock does not usually carry voting rights.


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