Categories: Product Development
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as “preferred shares”. (Source: InvestOpedia)
Definition of "Preferred Stock" by Chat GPT: Preferred stock is a type of ownership in a company that typically does not have voting rights but has priority over common stock in terms of dividends and liquidation. Preferred stockholders receive fixed dividends before common stockholders, and in the event of liquidation, they are paid off before common stockholders.
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