Encyclopedia > Preferred shares

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Preferred shares

The so-called preferred shares are a class of shares which, unlike ordinary shares, does not carry voting rights.

Instead, preferred shares usually take precedence over ordinary shares[?] when it comes to the distribution of profits and the liquidation[?] proceeds of a stock corporation[?].

Preferred shares may have a declared dividend.

The preferred shareholders take precedence over common stock holders when dividends are issued. Preferred stock may also be cumulative. If a company does not declare dividends for a given time period then the preferred share holders are paid cumulatively for the missed period during the next payout.

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