Preferred stock plays different roles for investors and business owners. When issued by companies it is to raise capital. For investors, it offers more security than common stock. Business owners make choice for preferred stock as a means of growing their business. Stock that represents the owner to preference in the distribution of dividends and the proceeds of liquidation in the event of bankruptcy. Preferred stocks are listed as equity on a balance sheet, but they perform more like bonds than common stock since most of these issues pay a fixed dividend set at the time of issue.