What are “Preferred Stocks”?

Preferred Stocks: These type of stocks usually do not have voting rights, but they give the owner a larger claim on assets and earnings compared to common shares. Preferred stocks are also higher in the claim ladder. This would mean that owners of this type of stock have higher claim on a company’s assets and earnings compared to common stock.

This type of stock has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders, and the shares usually do not carry voting rights.

Preferred stock finally combine the features of debt (pays fixed dividends) and that of equity (potential to appreciate in price). The details or information of each preferred stock depend on the issue.

 

About Nick

Nick is an author at holdencasey.com. He writes for all categories, but his specialty is defense and law. He normally writes from an unbiased viewpoint, but is known to provide a conservative opinion.
View all posts by Nick →

Leave a Reply

Your email address will not be published. Required fields are marked *