preferred share

Preferred share which provides a specific dividend that is paid before any dividends are paid to common share holders, and which takes precedence over common share in the event of a liquidation. Like common stock, preferred share represent partial ownership in a company, although preferred shareholders do not enjoy any voting rights of common stockholders. Also unlike common stock, a preferred share pays a fixed dividend that is fixed, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred share is that the investor has a greater claim (hence safety) on the company's assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders.