Preferred Stock
Definition
What is Preferred Stock?
A class of share that usually has priority over ordinary shares for dividends and liquidationThe process of selling an entity's assets, paying creditors, and distributing any remainder to owners. proceeds.
Example in practice
How This Looks in Practice
A preferred shareholderA person or entity that owns one or more shares in a company. receives the stated dividendA payment made from a company's profits to eligible shareholders. before common shareholders.
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Related Terms
Common Stock
A share that usually carries voting rights and a residual claim on a company's profits and assets.
Equity InvestingOrdinary Share
The standard ownership share in a company, generally equivalent to common stock.
Equity InvestingShareholder
A person or entity that owns one or more shares in a company.
Equity Capital MarketsInitial Public Offering
The first public sale of a private company's shares, after which the shares may trade on an exchange.