Maine Preferred Stock Certificate

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Multi-State
Control #:
US-1080BG
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Word; 
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Description

Preferred stock is a class of shares of stock in a corporation which gives the holders priority in payment of dividends and distribution of assets in case of dissolution of the corporation over owners of "common" stock. Preferred stock shareholders do not participate in higher dividends if the corporation makes large profits, and usually cannot vote for directors. Also unlike common stock, a preferred stock pays a fixed dividend that does not vary, although the company does not have to pay this dividend if it lacks the financial ability to do so. The dividends paid to preferred shares are deducted as an expense because they are required payments, unlike the common stock dividend which is just a sharing in part of the profits. Like common stock, preferred stocks represent partial ownership in a company. A stock certificate must be in writing and signed by the designated corporate officers. It is contractual in nature, since it either sets forth or incorporates by reference the rights, privileges, and duties of the corporation and of the stockholder, both in their relationship to each other and to other stockholders.
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How to fill out Preferred Stock Certificate?

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FAQ

To fill out a stock certificate, you fill in the name of the shareholder, the name of the corporation, the number of shares represented by the certificate, the date, and possibly an identification number. There is also a space for a corporate officer to sign on behalf of the corporation and to affix the corporate seal.

Preferred securities generally have long maturity dates?like 30 years or longer?or no maturity date at all, meaning they are perpetual in nature. However, most preferreds have a stated "call date" that the issuer may choose to redeem them, usually at the par value.

How do money market funds work? Money market funds invest in very-low-risk assets like Treasury bonds, CDs, or short-term, high-quality corporate bonds with maturities of less than a year. Unlike stock or bond funds, they have a fixed price of $1 per share.

Preferred shareholders who convert their shares give up their rights as preferred shareholders (no fixed dividend or higher claim on assets) and become common shareholders (with the ability to vote and participate in share price appreciation).

Preferred stock is sometimes used by companies as a takeover defense by assigning very high liquidation value for the preferred shares that must be paid off if the company is taken over.

An investor owning a callable preferred stock has the benefits of a steady return. However, if the preferred issue is called by the issuer, the investor will most likely be faced with the prospect of reinvesting the proceeds at a lower dividend or interest rate.

A preferred stock certificate is a document that identifies the ownership share of an investor in a corporation.

Preferred shares are so called because they give their owners a priority claim whenever a company pays dividends or distributes assets to shareholders. They offer no preference, however, in corporate governance, and preferred shareholders frequently have no vote in company elections.

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Maine Preferred Stock Certificate