- stock that has a superior claim to that of common stock with respect to dividends and often to assets in the event of liquidation.
Origin of preferred stock
An Americanism dating back to 1840–50
Dictionary.com Unabridged Based on the Random House Unabridged Dictionary, © Random House, Inc. 2018
- US and Canadian shares representing part of the capital issued by a company and entitling their holders to priority with respect to both net profit and net assets. Preferred stock usually carries a definite rate of dividend that is generally lower than that declared on common stockAlso called (in eg Britain, Australia): preference shares