Preferred Stock

Knowledge Center





Summary, forum, best practices, expert tips and information sources.

 

What is Preferred Stock? Meaning.

Preferred Stock is a class of equity that pays dividends at a specified (normally fixed) rate, regardless of corporate earnings, prior to the claim of common stockholders. In the case of bankruptcy / liquidation these stocks normally give its holder a claim on the assets of the company, also prior to the claim of common stockholders. As a result, the associated risk with owning this class of securities is lower than common stock.


The major drawbacks of this type of shares are that they normally do not profit from dividend increases of the common stocks, and they normally do not have regular voting rights associated with them.


Preferred Stocks can have a number of additional rights attached to them:

  • Special voting rights. See: Proportional Voting.

  • Anti-dilution provisions.

  • Right of first refusal with respect to issuing new shares.

  • Cumulative rights. The preferred dividend can be cumulative, in which case they will be carried forward if they are not paid in a particular year. Note that the process of deferring preferred dividends can go on indefinitely; cumulative dividends are not debts of the company.

  • Convertible rights.

  • A warrant.

  • Other rights.


Preferred Stock Special Interest Group


Special Interest Group (6 members)

Forum about Preferred Stock  

The most recent topics about: Preferred Stock.


🔥 NEW Preferred Stock Cases and Examples
Hi, do you know of a remarkable case or an interesting example of the use of preferred stock?Please enter a reaction to (...)
2
0 reactions
 
Best Practices about Preferred Stock

Here you will find the most valuable ideas and practical suggestions.


Expert Tips about Preferred Stock

Here you will find professional advices by experts.


Information Sources about Preferred Stock

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.



Compare with: Convertible Preferred Stock  |  Liquidation Value  |  Venture Capitalists  |  Warrant  |  Redemption Value

Special Interest Group Leader

Are you an expert in Preferred Stock? Sign up for free

Link to this knowledge center

Copy this code to your web site:

 
 

Return to Management Hub: Change & Organization  |  Decision-making & Valuation  |  Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Preferred Stock summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2020 12manage - The Executive Fast Track. V15.6 - Last updated: 28-9-2020. All names of their owners.