Preferred Stock
Capital stock having priority over a corporation's common stock in the distribution of dividends and often of assets. Holders of preferred stock receive dividends at a fixed annual rate. The earnings of a corporation are applied to this payment before common stockholders receive dividends.
However, there is also a negative side of preferred stocks. Holders of preferred stock usually do not have voting rights, and there is less potential for appreciation.
| Related Terms: Preferred Shares Prior Preferred Stock Sweetener Trust Preferred Securities Balanced Fund |
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