What type of shares of stocks are issued with privileges in the distribution of dividends and net assets of the corporation?

Preferred shares are a class of stock that provide specific privileges in regard to dividends and the distribution of assets upon liquidation. Holders of preferred shares typically receive dividends at a fixed rate before any dividends are distributed to common shareholders. This preferential treatment also extends to the distribution of assets; in the event of the corporation's liquidation, preferred shareholders have a higher claim on the company's assets after debts have been settled but before common shareholders receive any payouts.

This structure makes preferred shares an attractive option for investors seeking steadier income, as they are likely to receive dividends even in less favorable financial conditions for the corporation. The rights and privileges of preferred shares can vary based on the corporate charter or the associated bylaws, which may establish additional benefits, such as convertibility into common shares or enhanced voting rights in specific scenarios.

In contrast, common shares represent ownership in a corporation without the same level of guaranteed returns or priority in asset distribution. While common shareholders can benefit from increases in the company's value and receive dividends, such payments are not assured and are made only after preferred dividends are satisfied. Other options like special shares or privileged shares are less commonly referenced in general corporate terminology when discussing stock types and may refer to specific features that do not universally align with the major classifications of stock