Preferred Stock
What is it? A stock with a fixed dividend that is paid before common stock dividends. Generally, the preferred dividend is higher than the common stock dividend. And it is usually cumulative, which means that the company will make up any missed payments. Preferred stockholders do not have voting rights. In the event that a company liquidates its assets through bankruptcy, preferred stockholders stand in line ahead of common stockholders to receive payment. Holders of corporate bonds and secured debt, however, are entitled to some kind of recovery before preferred stockholders. Preferred stocks are listed in the stock tables with the amount of the dividend. Prices of these stocks are volatile because these shares are thinly traded compared to common stock.Added By: Wyatt
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