It is true that preferred stockholders are guaranteed to receive dividend payments each year.
Preferred stocks refer to those components of an organization which is not held by the common stocks of the company. Having preferred stocks has both its advantages and disadvantages.
Preferred stockholders are guaranteed to get a stipulated amount of dividend every year. They even receive their dividends before the common stockholders. The common stockholders are at the lowest strata and are paid after the other officials and partners are paid.
However, the common stockholders have a voting right. The preferred stockholders lose that right when they buy preferred stocks. They have no voice in the decisions of the company or the organization.
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