A class of share capital that entitles the owners to a fixed dividend ahead of the company’s common shares and to a stated dollar value per share in the event of liquidation. Usually, owners of these do not have voting rights unless a stated number of dividends have been omitted.
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- Dividends
A dividend is a portion of a company’s profit paid to preferred and common shareholders. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%.