Preferred Shares
Definition: Preferred shares are a type of stock in a company. When you own preferred shares, you get paid dividends (a share of the company's profits) before common shareholders do. However, if you own preferred shares, you usually do not have the right to vote in company decisions.
Usage Instructions: - You can use "preferred shares" when discussing investments or finance. - It is often used in the context of talking about the stock market, investment strategies, or company financing.
Example: "I decided to invest in preferred shares because they offer a fixed dividend and less risk compared to common stocks."
Advanced Usage: - Preferred shares can be classified into different categories, such as cumulative, non-cumulative, convertible, or participating, depending on their features. - Investors often choose preferred shares for income stability, especially in low-interest-rate environments.
Word Variants: - Preferred Stock: This is another term for preferred shares and is used interchangeably. - Common Shares: Different from preferred shares, common shares usually come with voting rights but are paid dividends after preferred shares.
Different Meanings: - In a non-financial context, "preferred" can simply mean something that is liked more than something else. For example, "My preferred method of transportation is by bicycle."
Synonyms: - Preferred stock (as mentioned) - Priority shares - Preference shares
Idioms and Phrasal Verbs: - There are no specific idioms or phrasal verbs directly related to "preferred shares," but you might hear phrases like "put your money where your mouth is," which means to invest in what you believe in, including preferred shares.
Summary: Preferred shares are a safer investment option because they promise dividends before common shares, but they do not allow shareholders to vote on company matters.