Preferred Stock

Preferred stock is a class of ownership in a corporation/company that has a higher claim on its assets and earnings than common stock. Holders of preferred stock are entitled to receive dividends before common shareholders, often at a fixed rate. In the event of bankruptcy or liquidation, preferred shareholders have priority over common shareholders in the distribution of assets, though they come after debt holders.
These shares can sometimes be convertible into a certain number of common shares, offering potential for capital gains.
Companies might issue preferred stock to raise capital without diluting voting power, appealing to investors seeking steady income with a higher claim than common equity.