In this episode of Money Lessons, Andy explores preferred stock — the hybrid security that sits between bonds and common stock in a company's capital structure. He traces its origins to the Railway Mania of 1840s Britain and the aftermath of the Panic of 1837 in America, where distressed railroads and canal companies invented a new class of shares to attract cautious investors. 

Andy explains how preferred stock borrows features from both debt and equity, defines the critical distinction between cumulative and non-cumulative preferred shares, and shows where preferred shareholders stand in the priority hierarchy alongside bondholders and common shareholders.

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