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preferred stock
noun
: stock guaranteed priority by a corporation's charter over common stock in the payment of dividends and usually in the distribution of assets
Examples of preferred stock in a Sentence
Recent Examples on the Web
Net loss for the period was $720 million, more than half of which was an accounting loss tied to converting preferred stock to common stock at the IPO.
—Phoebe Liu, Forbes, 17 Oct. 2024
If certain other conditions are met, the preferred stock would convert to common stock at $17.25 per share, which would give Beyond a 40 percent ownership stake of The Container Store’s common equity.
—Vicki M. Young, Sourcing Journal, 3 Sep. 2019
Another risk to consider is that investors holding preferred stock have lower seniority than bondholders in a company’s capital structure.
—Darla Mercado, Cfp®, CNBC, 10 Oct. 2024
Buffett first invested in America’s second-largest bank when Berkshire bought $5 billion worth of preferred stock in 2011, a vote of confidence in CEO Brian Moynihan’s ability to lead the lender’s recovery following the 2008 financial crisis.
—Bygreg McKenna, Fortune, 25 Sep. 2024
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Word History
First Known Use
circa 1859, in the meaning defined above
Time Traveler
The first known use of preferred stock was
circa 1859
Dictionary Entries Near preferred stock
Cite this Entry
“Preferred stock.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/preferred%20stock. Accessed 14 Nov. 2024.
Legal Definition
preferred stock
see stock
More from Merriam-Webster on preferred stock
Britannica.com: Encyclopedia article about preferred stock
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