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Definition

Preferred stock

Preferred stock refers to the stock that is typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporations in the event of liquidation.

To appeal to more investors, a corporation may issue an additional class of stock, called preferred stock. Preferred stock has provisions that give it some preference or priority over common stock. Typically, preferred stockholders have a priority as to (1) distributions of earnings (dividends) and (2) assets in the event of liquidation. However, they generally do not have voting rights.

Preferred stockholders have the right to receive dividends before common stockholders.


Preferred stock is the type of bank capital measured by the par value of any shares outstanding that promise to pay their owners a fixed rate of return or (in the case of variable-rate preferred) a rate determined by an agreed-upon formula.


Preferred stock is the shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock.


Preferred stock is a class of stock that has a prior or senior claim on assets to that of common stock.


Stock that has preference over common stock in the payment of dividends and in claims against the assets of the firm, but does not confer voting rights.

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