Basically the preferred shareholder is first in line when redistribute the assets of a firm. This is the major advantage over common stock. Preferred stock often pays a perpetual fixed dividend.
Experts often say that it is more like a consol bond than a share of common stock.
Corporations favor preferred stock because of its tax advantages. Corporations may issue different forms of stock called classes. The specific class of stock and its various differences must be considered before the investment decision is made. The result of the stock split will increase investment activity because of the attractive nature of the lower price. The overall value of the company will not be affected by the stock split.