Preferred Equity - Preferred equity is a measure of ownership interest in a corporation which only counts the preferred stock. Preferred Equity is equal to shareholder's equity (in total) minus common equity. Preferred equity shareholders usually receive their dividend before common equity holders. When a company is going bankrupt, preferred equity holders will be paid before common equity holders, but after the debt holders. Companies usually try to pay out par value of each equity. Preferred equity owners usually carry no voting rights. Other special rights to preferred equity may be issued by the board of directors of a company.