Preferred Stocks Presented by Pete Mitchell

Before I explain preferred stocks, let me explain dividends. Dividends are a part of the earnings that a corporation has that are paid out to it’s shareholders – usually on a quarterly basis. Let me give an example. Let’s say you own 1 share of xyz company, and that company is paying out a $5 annual dividend. Every quarter you would receive $1.25 for every share that you owned.