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Preferred Stock

   

Definition: Preferred Stock is a class of equity that pays dividends at a specified (normally fixed) rate, regardless of corporate earnings, prior to the claim of common stockholders. In the case of bankruptcy / liquidation these stocks normally give its holder a claim on the assets of the company, also prior to the claim of common stockholders. As a result, the associated risk with owning this class of securities is lower than common stock.


   
   
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