Series 66: Preferred Dividends

Preferred Dividends

As with common stocks, dividend payments for preferred shares often are paid quarterly. Unlike with common stocks, however, dividend payments for preferred shares are determined when the stock is issued. A fixed-rate preferred stock may set its dividend payment at a fixed dollar value ($5), or the dividend may be based on a percentage of the par value of the stock as stated on the stock certificate (5%).

Dividends come out of earnings, and a company may decide not to pay th