The one thing constant about preferred shares is their seniority. Preferred shareholders are the senior equity holders in a company and have “preference” in terms of dividend payments and distributions in the case of bankruptcy. Beyond this, preferred shares come in many varieties. Their payment terms and structure are very flexible and lead to the many different types of preferred shares available in the financial markets.
Preferred Shares: Term or Maturity
A good starting place for considering preferred shares is to look at the term or maturity provided for in their structure. Usually the name of a preferred share gives away its term nature: