Preferred Stock
Preferred stock is a type of equity that often pays fixed dividends and has priority over common stock in asset liquidation. Holders of preferred stock generally do not have voting rights, but they receive dividend payments before common shareholders. This makes preferred stock a hybrid between equity and debt, offering a more stable income stream while still allowing some level of ownership in the company.
Key Takeaways
- Equity with fixed dividends and liquidation priority.
- No voting rights for holders.
- Dividend payments precede those of common stock.
- Offers a stable income stream with ownership benefits.
