Preferred Stock Financial Glossary

What is it? A type of equity or capital representing shares of ownership in a corporation. May or may not receive distributions of corporate income in the form of dividends. Has a higher priority claim to corporate earnings or assets than common stock but lower priority than corporate debt. A corporation may issue more than one class of preferred stock with differing priority status such as first or second preferred. Often preferred stock issues have a defined dividend payment rate as long as there are sufficient corporate earnings to distribute.

Finance Term Definition Added By: Katherine

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