What is Preferred Stocks What are some of their characterist

What is Preferred Stocks? What are some of their characteristics?

Solution

Preferred stocks are the stocks that pays fixed and regular interest income instead of a divivdend. It has the has the qualities of both common stock and bond. holders of preferred stocks have claim over the companies earning ahead of common stock holders but behind the claim of bond holders and other creditors.

CHARACTERISTICS OF PREFERRED STOCK

1. Convertibility to common shares

2. Non voting

3. Ability to redeem before it metures

4. Preference in dividends

5. Rights on assets