First-Preferred Stock

Loading the player...

DEFINITION of 'First-Preferred Stock'

First-preferred stock is an equity ownership that has seniority over preferred and common stock, particularly with respect to dividends and assets. First-preferred stock is also superior to second-preferred stock, but is subordinate to debt holders.

BREAKING DOWN 'First-Preferred Stock'

Preferred stock holders typically have no voting privileges. However, they have priority over other subordinate forms of equity for dividends and claims on the company's assets in the case of liquidation. However, often times there are no assets remaining after a bankruptcy or liquidation after debt holders have been paid back.

RELATED TERMS
  1. Junior Equity

    Junior equity refers to equity that ranks lower than some other ...
  2. Convertible Subordinate Note

    A short-term debt security that can be changed into common stock. ...
  3. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) ...
  4. Subordinate Financing

    Debt financing that is ranked behind that held by secured lenders ...
  5. Prior Preferred Stock

    A type of preferred stock with a higher claim on assets and dividends ...
  6. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
Related Articles
  1. Economics

    Understanding Subordinated Debt

    A loan or security that ranks below other loans or securities with regard to claims on assets or earnings.
  2. Investing Basics

    Not All Debt Holders Are Equal

    Senior debt is borrowed money a company repays first if the company goes out of business.
  3. Options & Futures

    20 Investments: Preferred Stock

    What Is It? Preferred stock represents ownership in a company, but it usually does not give the holder voting rights (this may vary depending on the company). With preferred shares, investors ...
  4. Professionals

    Corporate Securities: Preferred Stock

    Preferred stock is not issued by all companies. It is called "preferred" because its holders receive available dividend payments before common stockholders, and they also receive payments ...
  5. Professionals

    C. Why Do People Buy Common Stock?

    The main reason people invest in common stock is for capital appreciation. They want their money to grow in value over time. An investor in common stock hopes to buy the stock at a low price ...
  6. Professionals

    Preferred Stock

    Series 7 - Equities Section 3: Preferred Stock
  7. Investing

    Advising FAs: How To Explaining Stocks to a Client

    Without a doubt, common stocks are one of the greatest tools ever invented for building wealth.
  8. Professionals

    Preferred Stock

    NASAA Series 65: Section 9 Preferred Stocks. In this section characteristics of preferred stocks and cumulative vs. noncumulative preferred shares,
  9. Options & Futures

    Get Preferential Treatment

    The only real difference between you and Warren Buffett is a few well-chosen stocks – the billion-dollar fortune is the result.
  10. Term

    The Advantages of Preferred Dividends

    Preferred dividends are cash distributions a company pays on its preferred shares.
RELATED FAQS
  1. What is the difference between subordinated debt and senior debt?

    Understand the difference between subordinated debt and senior debt. Learn what a company is required to do in case of bankruptcy. Read Answer >>
  2. What is common stock and preferred stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ... Read Answer >>
  3. Can preferred stocks be traded like common stocks? Are their prices the same?

    First, let's look at the differences and similarities between common stocks and preferred stocks. Both represent a piece ... Read Answer >>
  4. What is the difference between the equity market and the stock market?

    Discover the basic information about the equity, or stock, market and the two primary classifications of equities that are ... Read Answer >>
  5. Can anyone own common stock in a company?

    Understand who can purchase common stock as well as the key characteristics that differentiate common stock from preferred ... Read Answer >>
  6. What is the difference between horizontal integration and vertical integration?

    Learn about the differences between bonds and preferred shares, including how payments are made on them and how corporate ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center