Preferred stock

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Preferred stock is class of capital stock that has preference to a corporation's profits and assets.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Preferred stock. Class of capital stock that has preference to a corporation's profits and assets.

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Preferred stock. A hybrid security that is similar to bonds in some respects and to common stock in other respects. Preferred dividends are similar to interest payments on bonds in that they are fixed in amount and generally must be paid before common stock dividends can be paid. If the preferred dividend is not earned, the directors can omit it without throwing the company into bankruptcy.

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