Common Stock Preferred Stock | Definition | What is it?

Common Stock Preferred Stock

Common Stock Preferred Stock | Definition

A security that represents an ownership interest in a corporation and gives the holder a claim, prior to any claims of common stockholders, on earnings and generally on assets in the event of liquidation. Most preferred stock pays a fixed dividend, stated in a dollar amount or as a percentage of par value, whereas common stock dividends may fluctuate depending upon company earnings. Preferred stock does not usually carry voting rights. It shares characteristics of both common stock and debt.

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