Preferred stock - Financial definition
Financial acronyms
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Concise definition of the term preferred stock
Preferred stock is a hybrid type of security in that it has characteristics from both bonds and equity. They usually pay their owners a fixed dividend, but do not entitle them to voting rights which a common stock offers.
Comprehensive definition of the term preferred stock
Preferred stock is classified as equity on the balance sheet, but its holder does not have ownership interests in the company. If the company fails to pay dividends to holders of preferred stock, this would not result in bankruptcy as would the failure to pay interest on a bond.