Which type of shares give owners limited voting rights and the right to receive dividends before common shareholders?

Preferred shares are a specific type of equity security that provides certain advantages over common shares. Holders of preferred shares have limited voting rights, which means they do not typically participate in company decision-making to the same extent as common shareholders. However, the key feature of preferred shares is their preferential treatment regarding dividends.

When a company declares dividends, preferred shareholders are paid before common shareholders, making these shares an attractive option for investors seeking stable income. Additionally, preferred shares usually come with a fixed dividend rate, providing predictability for investors. This preference in dividends can be particularly important for companies that want to attract a certain class of investors who prioritize income stability over voting rights. Thus, preferred shares represent a strategic choice for both investors and companies looking to manage their equity structure effectively.