Preferred stock

Preferred stock, also known as a preferred share or simply a preferred, is typically a higher ranking stock than common stock, and its terms are negotiated between the corporation and the investor. Preferred stock may or may not carry voting rights, and may have superior voting rights to common stock. Preferred stock may carry a dividend that is paid out prior to any dividends to common stock holders. Preferred stock may have a convertibility feature into common stock. Preferred stock holders will be paid out in assets before common stockholders and after debt holders in bankruptcy. All the terms of the preferred stock will be stated in the "Certificate of Designation" which should be carefully read.

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