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preferred stock

preferred stock

4 5.5
A share that pays owners dividends before common shareholders but usually has no voting rights
  • noun
  • /prɪˈfɜrd stɑk/
  • Specialized
translation icon : acciones preferentes
  • If we give Daniel preferred stock, some engineer with 10 times his talent gets nothing.
  • common and preferred stock

For instance, hybrid instruments such as convertible bonds or convertible preferred stock may be listed on stock or bond exchanges.

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Examples

  • Investors often choose preferred stock because it provides fixed dividends and higher priority over common stock.

  • In general, there are four different types of preferred stock:

    Blog text (18)
  • "Regarding our position as of noon on Wall Street, the prices of Denver-Carrington common and preferred stock are still falling."

  • The rebate would be paid by the Treasury Department and then exchanged for preferred stock in the company that produced the car.

    Blog text (30)
  • The main benefit of owning preferred stock is that you have a greater claim on the company's assets than common stockholders.

    Blog text (18)
  • In 1994, Norilsk paid dividends of 3,314 rubles per share of preferred stock and 1,000 rubles per share of common stock.

    Academic text (1996)
  • The company issued new preferred stock to attract investors looking for steady income from dividends.

  • Many retirees prefer preferred stock for its reliable dividend payments despite not having voting rights.

Synonyms

preferred shares
vspreferred stock
  • Specialized
1 5.1

An investment in a company that pays dividends first but usually gives no voting rights

is the same meaning but uses an alternate form
preference shares
vspreferred stock
  • UK
6.8

An investment that gives a fixed payment before other company investors and usually has no voting rights

gives priority in dividend payment but does not require a fixed amount

How Senior

preferred stock
  • Specialized
4 5.5
common stock
  • US
8 4.0

Surface Forms

Morphology

preferred + stock

The phrase is compositionally built from 'preferred' (given priority) + 'stock' (a share), so a B1 learner who knows both words can infer it denotes a type of share that receives some preference or priority. However, the precise financial implications (priority in dividends versus typical limits on voting rights) are specialized and not fully predictable from the constituents alone.

Etymology

Preferred stock comes from the idea that some shares are preferred — they are first in line when a company pays money to owners. So these holders are 'paid first' for dividends, even though this kind of stock usually does not give 'voting' rights.