### Question
What does preferred stock mean?


### Answer
**Preferred stock** has the following meaning in *26 U.S.C. § 351*:

> stock which is limited and preferred as to dividends and does not participate in corporate growth to any significant extent

#### Citation:
  - *26 U.S.C. § 351*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART III-CORPORATE ORGANIZATIONS AND REORGANIZATIONS > Subpart A-Corporate Organizations**

