What rights do owners of preferred shares have?

Owners of preferred shares primarily hold priority in dividend payments and asset distribution upon liquidation. This means that preferred shareholders are entitled to receive dividends before any dividends are distributed to common shareholders. In the event that the company is liquidated, preferred shareholders also have a preferential claim to the company’s assets over common shareholders. This establishes a layer of financial security for preferred shareholders, which is a significant advantage compared to common shareholders who may only receive dividends and distributions after preferred shareholders have been satisfied.

Preferred shares typically do not carry voting rights in most situations, which distinguishes them from common shares. Voting rights in corporate matters are generally reserved for common shareholders, and this is why the answer related to voting rights is not correct. Additionally, while preferred shareholders may receive fixed dividends, they do not usually enjoy the same variability of dividend rights as common stockholders and are therefore not in an equal position regarding dividends. Lastly, the rights to nominate directors are typically associated with common shareholders, not preferred shareholders, which further emphasizes the distinctive nature of the rights held by preferred stockholders.