Preferred Stock
Equity that behaves like debt — a stated dividend and a liquidation preference ahead of common, usually without a vote.
Preferred stock sits between debt and common equity. It carries a stated dividend rate and a liquidation preference that must be satisfied before common holders receive anything, and it usually carries no ordinary voting rights. Terms vary enormously by series — cumulative or not, convertible or not, callable, perpetual or dated — and those terms live in a certificate of designations filed as an exhibit, not in a summary table.
In detail
Preferred stock is equity by legal form and debt-like by economics. Each series is created by a board resolution under blank-check authority in the charter, memorialized in a certificate of designations filed with the state and attached as an exhibit to an 8-K, S-1, or 10-K. Because each series is bespoke, the series name — Series A, Series B, Series 4.75% Cumulative Perpetual — is a label, not a specification. The exhibit is the specification.
A holder owns a claim to a stated dividend and to a fixed liquidation amount, typically $25 per share for exchange-listed retail preferred and $1,000 for institutional issues. A series may be fixed-rate, floating-rate, or fixed-to-floating, and occasionally participating in earnings beyond the stated rate. Whether missed dividends accumulate as an arrearage that must be cleared before common dividends resume — cumulative — or simply vanish — non-cumulative — is one of the most consequential terms and one of the most frequently misread. Convertible preferred adds a right to exchange into common at a stated ratio. Callable preferred gives the issuer a right to redeem at a stated price after a stated date, which caps the instrument's value near that price once the call date passes. Voting rights are usually contingent: many series gain the right to elect directors only after dividends have been in arrears for a specified number of periods.
Lifecycle events appear in filings. Creation and terms: 8-K with the certificate of designations as an exhibit; the prospectus supplement (424B) for a public offering. Dividend declarations, suspensions, and resumptions: 8-K, with arrears and covenant pressure described in the periodic reports. Redemption: 8-K and a notice of redemption; listed preferred is also subject to exchange notice. Conversion: 8-K and the resulting change in common share count on the next periodic report. Exchange offers that swap one series for another: S-4 or Schedule TO.
Before assuming anything, read the certificate of designations for cumulation, call date and call price, conversion terms, and change-of-control provisions. Check whether the listed security is the preferred itself or a depositary share representing a fraction of a preferred share — a distinction that changes the stated dividend per listed unit. Check whether dividends are currently being paid and whether an arrearage exists, and remember that listed preferred often trades thinly enough that the quote overstates the exit.
These values are read from the filing linked above. They describe the instrument, not its merits. Nothing here is investment advice.