what are the advantages of a preferred stock 
a preferred stock is a class of stock that is granted certain rights that differ from common stock namely preferred stock often possess higher dividend payments and a higher claim to assets in the event of liquidation in addition preferred stock can have a callable feature which means that the issuer has the right to redeem the shares at a predetermined price and date as indicated in the prospectus in many ways preferred stock share similar characteristics to bonds and because of this are sometimes referred to as hybrid securities who buys preferred stock preferred stock often provides more stability and cash flow compared to common stock therefore investors looking to hold equities but not overexpose their portfolio to risk often buy preferred stock in addition preferred stock investors receive favorable tax treatment the company issuing the preferred stock does not receive a tax advantage however institutional investors and large firms may be enticed to the investment due to its tax advantages 