Preferred Stock

1. Preferred stock is an equity security with preferences and features not associated with common stock. Preferred stock may include a preference relating to dividends, which may be cumulative or noncumulative, and participating or nonparticipating. Preferred stock also may include a preference relating to liquidation. Usually, preferred stock does not have voting rights. Capital stock that provides a fixed dividend paid before any dividends are paid to common shareholders. It takes precedence over common stock in the event of liquidation.