Preferred stock refers to the stock that a joint stock limited company gives subscribers certain preferential conditions when raising capital. Preferred stock has the following characteristics:

① Agreed dividend rate. The income of preferred shareholders is paid before ordinary shareholders, and the fixed dividend rate is determined in advance, and its income has nothing to do with the company's operating conditions.

(2) Give priority to paying off the remaining assets. When a joint-stock company goes bankrupt and liquidates, its distribution takes precedence over ordinary shareholders.

(3) the right to vote is restricted. Preferred shareholders have no right to participate in the operation and voting.

(4) Generally, it cannot be listed and traded. That is, the liquidity of preferred shares is limited to a certain extent. China issued preferred shares at the initial stage of stock tanning, such as FAW Jinbei and Beijing Tianlong in Shanghai market. With the deepening and standardization of the shareholding system reform, the number of preferred shares in China is relatively small at present, and most of them are problems left over from history.