- Zero dividend preferred shares are preferred shares that do not pay dividends.
- Ordinary shares are still subordinated to preferred shares with zero dividend.
- Zero dividend preferred shares receive capital gains and may offer a lump sum payment at the end of the investment period.
- Issuers benefit from zero dividend preferred shares because they allow them to raise capital, have no voting rights, and do not pay dividends.
- There are several advantages and disadvantages of zero dividend preferred stock for investors.