Mastering Python for Finance - Second Edition

Preferred stocks

Preferred stocks are stocks that have bond-like qualities. Owners of preferred stocks have seniority of claim on dividend payments over common stocks, which are usually negotiated as a fixed percentage of their par value. Although there is no guarantee of dividend payments, all dividends are paid on preferred stock first over common stock. In certain agreements on preferred stocks, dividends that are not paid as agreed may accumulate until they are paid at a later time. These preferred stocks are known as cumulative.

Prices of preferred stocks typically move in tandem with their common stock. They may have voting rights associated with common shareholders. In the event of bankruptcy, preferred stocks have a first lien of ...