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What is a preferred stock?

Preference shares (preferred stock) are company stock with dividends that are paid to shareholders before common stock dividends are paid out. There are four types of preferred stock - cumulative (guaranteed), non-cumulative, participating and convertible.

What are preferred shares?

Preferred shares are more common in private or pre-public companies, where it is useful to distinguish between the control of and the economic interest in the company. Government regulations and the rules of stock exchanges may either encourage or discourage the issuance of publicly traded preferred shares.

Do preference shares have a dividend?

Most preference shares have a fixed dividend, while common stocks generally do not. Preferred stock shareholders also typically do not hold any voting rights, but common shareholders usually do. Preference shares (preferred stock) are company stock with dividends that are paid to shareholders before common stock dividends are paid out.

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