Introduction
Preferred stocks, also known as preference shares, offer a unique investment opportunity for those looking for a middle ground between stocks and bonds; These securities possess characteristics of both stock and bond investments, providing investors with a balance of potential for capital appreciation and income generation.
What are Preferred Stocks?
Preferred stocks are a class of stock that grants certain preferences or privileges to its holders. Unlike common stocks, which offer voting rights and participation in the company’s profits through dividends, preferred stocks prioritize dividend payments over common dividends and typically do not offer voting rights.
