Preferred Shares Definition
known as preferred stock, preferred shares have a dividend that is paid before
dividends to common stockholders.
Preferred shareholders do not vote and the details of the design of a
preferred stock system vary company to company.
It has both debt (fixed dividends) and equity (appreciation). Preferred shares have both positive and
negative aspects. While preferred
shareholders have priority over common stockholders on earnings and assets in
the event of bankruptcy and have a fixed return, they do not have voting rights
and also have less potential for greater profit.