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Preferred Stock definitions Flashcards

Preferred Stock definitions
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  • Preferred Stock
    A class of equity with fixed dividend percentage, higher par value, no voting rights, and priority in dividends and liquidation over common stock.
  • Par Value
    A nominal value assigned to a share, often higher for preferred stock, used to calculate dividends and record equity.
  • Dividend Preference
    The right to receive dividends before common stockholders, typically at a fixed rate based on par value.
  • Liquidation Preference
    Priority status in receiving repayment of investment before common stockholders if a company is liquidated.
  • Voting Rights
    The ability to participate in corporate decisions, typically not granted to holders of preferred stock.
  • Common Stock
    A class of equity with lower par value, voting rights, and residual claim on dividends and assets after preferred stockholders.
  • Dividend Percentage
    A fixed rate, usually stated as a percent of par value, used to determine preferred stockholders' dividend amounts.
  • Additional Paid-In Capital (APIC)
    Equity account reflecting the amount received from stock issuance above par value, tracked separately for preferred stock.
  • Equity
    Ownership interest in a company, including both common and preferred stock, representing claims on assets after liabilities.
  • Dividend Distribution
    The allocation of declared dividends, with preferred stockholders receiving their fixed amount before any is given to common stockholders.
  • Issuance Entry
    Accounting record of stock issuance, involving cash received, credit to stock account for par value, and credit to APIC for excess.
  • Retained Earnings
    Accumulated profits not distributed as dividends, available to common stockholders after preferred claims are satisfied.
  • Shareholder
    An individual or entity owning shares in a company, classified as either preferred or common based on stock type.
  • Dividend Per Share
    The amount of dividend allocated to each share, calculated by dividing total dividends by the number of shares outstanding.
  • Bankruptcy
    A financial state triggering company liquidation, where preferred stockholders are prioritized for repayment over common stockholders.