Preferred Stock (Noun)
Meaning
Stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company issued preferred stock to raise capital without diluting the voting power of its existing shareholders.
- Investors seeking regular income often purchase preferred stock because of its guaranteed dividend payments.
- Preferred stock can be an attractive option for investors who want a relatively lower-risk investment with a fixed return.
- The preferred stockholders will receive their dividends before any common stockholders as per the company's dividend policy.
- By issuing preferred stock, the company was able to raise the necessary capital without sacrificing control to its existing shareholders.