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. Investing

    Understanding Subordinated Debt

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

    Not All Debt Holders Are Equal

    Senior debt is borrowed money a company repays first if the company goes out of business.
  3. 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.
  4. Investing

    The Advantages of Preferred Dividends

    Preferred dividends are cash distributions a company pays on its preferred shares.
  5. Investing

    What Is The Difference Between Preferred Stock And Common Stock?

    Most investors are familiar with common stock, but many know little about another form of company ownership: preferred stock.
  6. ETFs & Mutual Funds

    Looking for Yield? Check Out This Preferred Stock ETF (PFF)

    Take a look at a review of the performance of the most popular preferred stock ETF, the iShares U.S. Preferred Stock ETF from BlackRock.
  7. Markets

    The Different Between Preferred and Common Stock

    Preferred and common stocks are different in two key ways.
  8. Trading

    Preferred Stocks versus Bonds: How to Choose

    What is the difference between corporate bonds and preferred stock? The following are a list of pros and cons for each investment.
  9. Investing

    What is Cumulative Preferred Stock?

    Cumulative preferred stock is a type of stock that stipulates any skipped or omitted dividends must be paid to its holders before common shareholders can receive dividends.
  10. Investing

    What is Convertible Preferred Stock?

    Convertible preferred stock is preferred stock that can be converted into common stock as of a predetermined date at a specified ratio.
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 are the types of share capital?

    Understand the characteristics of common stock and preferred stock, the two ways by which companies obtain share capital ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center