Categories: Product Development
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as “preferred shares”. (Source: InvestOpedia)
Definition of "Preferred Stock" by Chat GPT: Preferred stock is a class of ownership in a corporation that provides priority or preference over common stock in terms of dividends and asset distribution in the event of liquidation. Holders of preferred stock typically receive a fixed dividend payment, which must be paid before dividends are paid to common stockholders. Preferred stock may also have other features such as callable or convertible options, which can be attractive to investors seeking a balance of income and potential capital appreciation.
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