A class of corporation stock that provides for preferential treatment over the holders of common stock in the case of liquidation and dividends. For example, the preferred stockholders will be paid dividends before the common stockholders receive dividends. In exchange for the preferential treatment of dividends, preferred shareholders usually will not share in the corporation’s increasing earnings and instead receive only their fixed dividend.
Featured Review
"AccountingCoach allowed me to understand accounting principles without any prior knowledge. Using simple to follow step-by-step explanations, I was able to grasp how debit and credit works, how balance sheet and income statement complimented each other, what the cash flow statement is and how to create one. I have tried many different books and online resources on accounting but only AccountingCoach managed to convey information in such a way that a person with zero previous knowledge or experience on the subject was able to finally understand and be able to apply it in real-life situations." - Alexander K.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: