# Preferred Stock

*Markets & Instruments — Finicade finance glossary*

Preferred stock is a hybrid: it pays a fixed dividend like a bond and ranks ahead of common stock in a liquidation, but usually carries no vote.

Preferred stock is a hybrid: it pays a fixed dividend like a bond and sits ahead of common stock in a liquidation, but usually carries no vote and no share in growth. It behaves far more like a bond than a share, which means it is driven by interest rates rather than earnings. Dividends can typically be suspended without triggering default, though cumulative preferreds require the arrears be paid before common shareholders see anything.

**Also known as:** preference shares, preferreds

**Related terms:** [Common Stock](https://finicade.com/glossary/common-stock), [Dividend](https://finicade.com/glossary/dividend), [Bond](https://finicade.com/glossary/bond), [Convertible Bond](https://finicade.com/glossary/convertible-bond), [Liquidation Preference](https://finicade.com/glossary/liquidation-preference)

Source: https://finicade.com/glossary/preferred-stock