What is preferred stock?

Answer by  worker7794 (53)

Preferred Stock also known as preferred shares is a financial instrument that is both fixed dividends and equity. It's a class of ownership in a company that has higher claim on assets and earnings than the common stock and dividends of preferred stock holder must be paid out first before the common stock holders.

Answer by  AG (46)

Perferred stock is stock that is issued by a corporation that pays a higher dividend than the common stock. Perferred stock is really a type of bond, in that you are paying a set rate for the stock in return for a set dividend. However, perferred stock holders are junior to bondholders if the corporation becomes insolvent and goes bankrupt.

Answer by  TheKingofMars (18)

Stock issued by a company that has a higher priority then other forms of stock. This may include a fixed yearly dividend, a fixed value should the company liquidate, and extra voting options. In the event of a bankruptcy holders of preferred stock are payed before holders of common stock.

Answer by  pedro (142)

Preferred stock is similar to common stock, but it has different voting rights. The main advantage of preferred stock is that its stockholders are paid by corporations before common stockholders. Preferred stockholders often have different voting rights--they frequently do not have voting rights for board of directors positions or other issues.

Answer by  Ginny (2251)

A preferred stock's dividend is fixed and paid out to holders before common stockholders are paid. In case of bankruptcy, repayments are made first to preferred stockholders. The price of preferred stock is normally higher than common stock and preferred stockholders do not have voting rights like common stockholders.

Answer by  Gabriel (2146)

Preferred stock is an ownership certificate for a company, similar to common stock. Preferred stock generally is worth more than common stock, because the stock generally has a larger dividend attached, which will be paid out before the common stock dividend. Owners of preferred stock also have voting rights that common stock owners don't.