If a "liquidation preference" is provided, preferred stock usually has priority over common stock to the extent the articles of incorporation state.

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Liquidation preference is a feature of preferred stock that gives holders the right to be paid before common stockholders in the event of a liquidation of the company. This preference is typically outlined in the company's articles of incorporation or the terms of the preferred stock.

If a "Liquidation Preference" Is Provided, Preferred Stock Usually Has