Preferred Shares definition: Copy, customize, and use instantly
Introduction
The term "Preferred Shares" refers to a type of equity security that gives its holders preferential treatment in terms of dividends and asset distribution in the event of liquidation, over common shareholders. Preferred shares are often used by companies to raise capital without diluting the control of existing common shareholders.
Below are various examples of how "Preferred Shares" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Preferred Shares" for dividend rights
This definition ties "Preferred Shares" to their right to receive dividends.
"Preferred Shares" means shares that are entitled to receive dividends before common shares, often at a fixed rate, and may include the right to accumulate unpaid dividends if not paid in any given period.
Definition of "Preferred Shares" for liquidation preference
This definition connects "Preferred Shares" to their priority in liquidation events.
"Preferred Shares" refers to equity securities that hold a higher claim on the company's assets than common shares in the event of liquidation, meaning they are paid before common shareholders.
Definition of "Preferred Shares" for voting rights
This definition links "Preferred Shares" to their role in voting rights, if any.
"Preferred Shares" means shares that typically do not have voting rights unless specified in exceptional circumstances, such as changes to the terms of the preferred stock or the company's structure.
Definition of "Preferred Shares" for convertible options
This definition ties "Preferred Shares" to their convertibility into common stock.
"Preferred Shares" refers to equity securities that can be converted into common stock at the holder’s discretion or under specified conditions, typically at a predefined conversion ratio.
Definition of "Preferred Shares" for redeemable features
This definition connects "Preferred Shares" to their redeemable features.
"Preferred Shares" means shares that are redeemable by the issuing company at its discretion, usually at a specified price or within a set time frame, allowing the company to repurchase them.
Definition of "Preferred Shares" for seniority over common shares
This definition links "Preferred Shares" to their seniority in claims on dividends and assets.
"Preferred Shares" refers to shares that have a higher priority than common shares for the payment of dividends and in the event of liquidation but are subordinate to debt holders.
Definition of "Preferred Shares" for cumulative dividends
This definition ties "Preferred Shares" to their entitlement to cumulative dividends.
"Preferred Shares" means shares that accumulate dividends if not paid in a given year, allowing the shareholder to receive unpaid dividends in future periods before any dividends are paid to common shareholders.
Definition of "Preferred Shares" for non-cumulative dividends
This definition connects "Preferred Shares" to their non-cumulative dividend feature.
"Preferred Shares" refers to shares where the dividend is not cumulative, meaning that if the company does not pay a dividend in any year, the right to receive it is lost and cannot be carried forward.
Definition of "Preferred Shares" for participating shares
This definition links "Preferred Shares" to their participation in additional profits.
"Preferred Shares" means shares that not only receive a fixed dividend but also have the right to participate in additional profits or assets after the common shareholders have received their payouts.
Definition of "Preferred Shares" for non-participating shares
This definition ties "Preferred Shares" to their non-participating features.
"Preferred Shares" refers to shares that receive only the fixed dividend and do not participate in additional profits beyond this, regardless of the company’s performance.
Definition of "Preferred Shares" for perpetual shares
This definition connects "Preferred Shares" to their perpetual nature.
"Preferred Shares" means shares that do not have a maturity date and are considered perpetual, providing continuous dividends unless the company redeems them.
Definition of "Preferred Shares" for fixed-rate dividends
This definition links "Preferred Shares" to their fixed dividend structure.
"Preferred Shares" refers to shares that provide a fixed dividend rate, paid at regular intervals, often based on a percentage of the share's par value or a predetermined fixed amount.
Definition of "Preferred Shares" for adjustable-rate dividends
This definition ties "Preferred Shares" to their adjustable dividend features.
"Preferred Shares" means shares that offer dividends with rates that may be adjusted periodically based on a specified formula or reference rate, such as LIBOR.
Definition of "Preferred Shares" for participating and convertible shares
This definition connects "Preferred Shares" to both participation and conversion features.
"Preferred Shares" refers to shares that not only participate in additional profits beyond the fixed dividend but also have the right to convert into common stock under specified conditions.
Definition of "Preferred Shares" for dividend preference
This definition links "Preferred Shares" to their dividend preference over common shares.
"Preferred Shares" means shares that have the right to receive dividends before common shares, ensuring priority in dividend distributions.
Definition of "Preferred Shares" for mandatory redemption
This definition ties "Preferred Shares" to their mandatory redemption feature.
"Preferred Shares" refers to shares that must be redeemed by the company on a specified date or after a certain period, typically at a predetermined price.
Definition of "Preferred Shares" for voting rights upon specific events
This definition connects "Preferred Shares" to their voting rights in certain scenarios.
"Preferred Shares" means shares that typically do not have voting rights but may acquire them if certain events, such as a change in the terms of the preferred shares or liquidation, occur.
Definition of "Preferred Shares" for liquidation preference over debt
This definition links "Preferred Shares" to their seniority over common stock in liquidation but after debt holders.
"Preferred Shares" refers to shares that are paid from the company's assets before common shareholders in the event of liquidation, but after creditors and debt holders have been satisfied.
Definition of "Preferred Shares" for early redemption
This definition ties "Preferred Shares" to their ability to be redeemed before maturity.
"Preferred Shares" means shares that may be redeemed by the issuing company prior to maturity, often at the company’s discretion, allowing it to retire the shares early.
Definition of "Preferred Shares" for structured products
This definition connects "Preferred Shares" to their use in structured financial products.
"Preferred Shares" refers to shares that form part of a structured financial product, offering investors a combination of fixed-income-like payments and equity participation.
Definition of "Preferred Shares" for private placements
This definition ties "Preferred Shares" to private offering contexts.
"Preferred Shares" means shares issued in a private placement offering, typically with specific terms tailored to the needs of institutional investors or select individuals.
Definition of "Preferred Shares" for hybrid securities
This definition connects "Preferred Shares" to hybrid financial instruments.
"Preferred Shares" refers to securities that combine features of both equity and debt, offering fixed dividends like bonds but providing ownership rights like common stock.
Definition of "Preferred Shares" for regulatory compliance
This definition links "Preferred Shares" to their use in meeting regulatory requirements.
"Preferred Shares" means shares that are issued to comply with regulatory or capital adequacy requirements, often by financial institutions to raise tier 1 capital.
Definition of "Preferred Shares" for dividend arrears
This definition ties "Preferred Shares" to their treatment of unpaid dividends.
"Preferred Shares" refers to shares that accrue dividends in arrears, which must be paid before dividends can be paid to common shareholders.
Definition of "Preferred Shares" for tax-exempt shares
This definition connects "Preferred Shares" to tax-exempt features.
"Preferred Shares" means shares that are issued with certain tax advantages, such as exemptions from tax on dividend payments, typically granted in specific jurisdictions.
Definition of "Preferred Shares" for rights in liquidation beyond the liquidation amount
This definition links "Preferred Shares" to their rights in liquidation after the fixed amount is paid.
"Preferred Shares" refers to shares that, after receiving their liquidation preference amount, may have rights to additional assets in the event of surplus assets after debt and common stock payments.
Definition of "Preferred Shares" for equity-based compensation
This definition ties "Preferred Shares" to employee or executive compensation.
"Preferred Shares" means shares granted to employees or executives as part of an equity-based compensation package, offering preferential treatment in dividends and liquidation.
Definition of "Preferred Shares" for issuer control
This definition connects "Preferred Shares" to the company's control over the shares.
"Preferred Shares" refers to shares where the issuing company has the right to redeem or adjust the terms, such as dividend rates or redemption prices, at its discretion.
Definition of "Preferred Shares" for financial distress situations
This definition links "Preferred Shares" to their role in distressed situations.
"Preferred Shares" means shares that may offer enhanced protections or advantages to investors in cases of financial distress or bankruptcy, including priority in dividend distribution or liquidation.
Definition of "Preferred Shares" for strategic corporate financing
This definition ties "Preferred Shares" to corporate financing strategies.
"Preferred Shares" refers to shares issued by a company as a strategic tool for financing, often in situations where the company seeks to raise capital without diluting control of common shareholders.
Definition of "Preferred Shares" for investment purposes
This definition connects "Preferred Shares" to their use by investors.
"Preferred Shares" means shares purchased by investors seeking more stable income streams through fixed dividends while having a priority claim in the event of liquidation.
Definition of "Preferred Shares" for corporate governance rights
This definition links "Preferred Shares" to governance and control rights.
"Preferred Shares" refers to shares that, under certain conditions, may grant the holder additional rights or influence over the company's governance, such as the right to vote on specific matters.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.