Preferred stocks are lower on the capital structure than any type of bond that the company may have issued. A preferred stock resides in that grey area between the equity and debt, so that, in the event of a bankruptcy, preferred stock shareholders are in front of only the common shareholders when recoveries are assigned.
Preferred stocks come in many flavors and are typically a funding mechanism for banks, insurance companies, shipping firms, and some energy companies. However, REITs can also be one of the more prolific preferred stock issuers. Shares are typically callable after