Preferred Stock

Preferred stock is a type of ownership in a company that gives shareholders certain advantages over common stockholders. Primarily, preferred shareholders receive dividends—a share of the company's profits—before common shareholders. They also have a higher claim on the company's assets if it goes bankrupt, meaning they are more likely to recover their investment. However, preferred stock typically doesn't come with voting rights in company decisions. It can be seen as a hybrid between stocks and bonds, offering regular income with a relatively lower risk compared to common stock.