How Do You Spell PREFERENCE STOCK?

Pronunciation: [pɹˈɛfɹəns stˈɒk] (IPA)

Preference stock refers to a type of stock that gives investors priority over common shareholders in terms of receiving dividends or assets during a company's liquidation. The spelling of "preference" is /ˈprɛfərəns/, with the primary stress on the second syllable and a schwa sound in the first and third syllables. The word "stock" is spelled /stɑk/, with a long "o" sound and no stress on the final consonant. Overall, the spelling of "preference stock" adheres to basic English phonetic principles.

PREFERENCE STOCK Meaning and Definition

1. Preference stock, also known as preferred stock, refers to a class of shares issued by a corporation that possesses certain privileges or preferences compared to common stock. It represents a type of equity ownership in a company that typically offers a fixed dividend payment and preference over common stockholders in the event of bankruptcy or liquidation.

   Preference stockholders receive their dividends before common shareholders, often at a fixed rate, which is typically stated as a percentage of the stock's face value. These dividends are generally paid out on a regular basis, providing shareholders with a steady income stream. In the event of liquidation, preference stockholders have a higher claim on the assets compared to common shareholders, and they are given priority in receiving their initial investment back.

   However, preference stockholders usually do not possess the same voting rights as common stockholders. They have limited or no voting power, depending on the specific terms of the stock offering. Additionally, preference stock generally does not have the potential for capital appreciation that common stock does.

   Overall, preference stock serves as a financial instrument that combines features of both debt and equity. It provides investors with a consistent income stream and a higher claim on the company's assets, but it generally lacks the potential for significant capital gains and voting rights that are associated with common stock.

Common Misspellings for PREFERENCE STOCK

• oreference stock
• lreference stock
• -reference stock
• 0reference stock
• peeference stock
• pdeference stock
• pfeference stock
• pteference stock
• p5eference stock
• p4eference stock
• prwference stock
• prsference stock
• prdference stock
• prrference stock
• pr4ference stock
• pr3ference stock
• prederence stock
• precerence stock
• preverence stock
• pregerence stock

Etymology of PREFERENCE STOCK

The term "preference stock" originates from the combination of the Latin word "praef" meaning "before" or "in front of", and the English word "reference". The etymology reflects the concept that preference stockholders have a higher claim or priority over common stockholders in terms of receiving dividends or upon liquidation of a company. The term "preference stock" has been commonly used in the business and finance domain since the early 19th century.

Plural form of PREFERENCE STOCK is PREFERENCE STOCKS