Company stock with pidends that are paid to shareholders before common stock pidends are paid out. In the event of a company bankruptcy, pferred stock shareholders have a right to be paid company assets first. Preference shares typically pay a fixed pidend, whereas common stocks do not. And unlike common shareholders, pference share shareholders usually do not have voting rights.
Also referred to as pferred stock.
There are four types of pference shares: Cumulative pferred, for which pidends must be paid including skipped pidends; non-cumulative pferred, for which skipped pidends are not included; participating pferred, which give the holder pidends plus extra earnings based on certain conditions; and convertible, which can be exchanged for a specified number of shares of common stock.