Preferred stock shareholders equity
Preferred stock (also called preferred shares, preference shares or simply preferreds) is a form of stock which may have any combination of features not possessed by common stock including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. If preferred stock exists, the preferred stockholders' equity is deducted from total stockholders' equity to determine the total common stockholders' equity. The preferred stockholders' equity is the call price for the preferred stock plus any cumulative dividends in arrears. The par value is used if the preferred stock does not have a call price. Preferred Stock. According to Money Crashers, preferred stock first began to be officially used by the railroads back in the 1800s. It has since become popular and the preferred class of shares for legendary billionaire investors like Warren Buffett.