Preferred stock

Introduction
A preferred stock, also known as a preferred share or simply a preferred, is a share of stock carrying additional rights above and beyond those conferred by common stock. These rights include priority in receiving dividends and precedence (after creditors) over common stock shareholders in claims to corporate assets upon liquidation. Preferred stock, as a yield investment, acts similar to a fixed income security, the price reacting primarily to changes in interest rates. Preferreds often do sport attractive yields, but in addition to interest rate risk, they're usually subject to call risk and nontrivial credit risk. Some preferreds pay qualified dividends, taxable to individuals at a maximum 15% rate.

Investopedia provides several relevant definitions:
 * Preferred Stock
 * Callable Preferred Stock
 * Convertible Preferred Stock
 * Participating Preferred Stock
 * Cumulative Preferred Stock

Mutual Funds
The Vanguard Preferred Stock Fund once existed, but it liquidated in July 2001. The most attractive current products are in the form of ETFs.
 * PFF: iShares S&P U.S. Preferred Stock Index Fund (expense ratio 0.48%)
 * PGX: PowerShares Preferred Portfolio (expense ratio 0.50%)
 * PGF: PowerShares Financial Preferred Portfolio (expense ratio 0.60%; invests only in securities which pay qualified dividends)

Academic Papers

 * Illessy, Janos K. and Shastri, Kuldeep, "The Debt-Equity Mix in Preferred Stock and Adverse Selection Costs: An Empirical Investigation" (November 2000). Available at SSRN: http://ssrn.com/abstract=251943
 * Bajaj, Mukesh, Mazumdar, Sumon C. and Sarin, Atulya, "Cost Of Issuing Preferred Stock: An Empirical Analysis" (November 2000). Available at SSRN: http://ssrn.com/abstract=251810
 * Bajaj, Mukesh, Mazumdar, Sumon C. and Sarin, Atulya, "The Offer Yield of Preferred Stocks" (February 2002). Available at SSRN: http://ssrn.com/abstract=267370

Links

 * QuantumOnline is a unique free resource for information on individual preferred stocks and related income producing securities. A simple registration process is required.
 * A Primer on Preferred Stocks from Investopedia
 * Introduction To Convertible Preferred Shares from Investopedia
 * Preferred Stock Primer: A Short Guide to Preferred Stocks and the S&P U.S. Preferred Stock Index from Standard & Poors
 * What's wrong with preferred stocks? (Bogleheads Forum topic)