Zero-Dividend Preferred Stock


DEFINITION of 'Zero-Dividend Preferred Stock'

A preferred share that is not required to pay a dividend to its holder. The owner of a zero-dividend preferred share will earn income from capital appreciation and may receive a one-time payment at the end of the investment term. Also referred to as "capital shares".


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BREAKING DOWN 'Zero-Dividend Preferred Stock'

Owners of zero-dividend preference shares will not receive a normal dividend. Often, they still maintain reimbursement priority over common shareholders in the event of bankruptcy. While a company may structure preferred shares however they choose, most preferred shares will not have voting rights.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Perpetual Preferred Stock

    A type of preferred stock that has no maturity date. The issuers ...
  4. Convertible Preferred Stock

    Preferred stock that includes an option for the holder to convert ...
  5. Callable Preferred Stock

    A type of preferred stock in which the issuer has the right to ...
  6. Participating Preferred Stock

    A type of preferred stock that gives the holder the right to ...
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