Preferred Stock

Definition

  • A security that gives partial ownership in a corporation and precedence over "common stocks." When dividends are allocated, preferred stocks are paid before common stocks, and if the corporation faces bankruptcy, debts to preferred stockholders are repaid before common stockholders, often leaving common stockholders with little or no reimbursement. Also known as "preferred share," "preference share," or "preferred."

Synonyms
preferred, preference share, preferred share

Alternate Spellings
common stock

Related Terms and Acronyms

  • Business (busn) Abbreviation,
    • A company, either for-profit or non-profit.
    • Commercial, industrial or professional activities undertaken by an entity.
    • Economic activities of a given type.
  • Common Stock (CS) Acronym,
    • A security that allocates partial ownership in a corporation, but at a lower standing than preferred stocks.
  • Corporation Definition,
    • A legal entity that is legally separate from its owners and employees.
  • Equity Definition,
    • Ownership in an asset.
    • The value of a property minus outstanding mortgage debt and other liens.
  • Incorporated Business Definition,
    • A company that exists as a corporation.
  • Initial Public Offering (IPO) Acronym,
    • When shares of a corporation become available to the public for the first time.
  • Investment Banking (IBK) Acronym,
    • Bank operations that manage a bank's funding position, as well as its holdings of Treasury bills, bonds and preferred and common stock.
  • Privately Held Company Definition,
    • A company that is not listed on a stock exchange.
  • Publicly Traded Company Definition,
    • A company that is sold on a stock exchange.
  • Return on Equity (ROE) Acronym,
    • A ratio that shows how profitable a company is when compared to shareholder equity.
  • Secondary Market Definition,
    • A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
  • Security Definition,
    • A tradable financial implement that represents ownership, the rights to ownership or debt.
    • Property designated as collateral.
    • A document stating ownership of a stock or bond.
  • Stock Definition,
    • A share of the ownership of a company.
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