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Finance Dictionary and Glossary of Investment Terms
Preferred or common stock of one corporation whose dividends are guaranteed by another corporation. Since the dividends are guaranteed, investors are generally willing to pay a higher amount for the stock than if the stock was not backed up by a guarantee. How valuable the actual guarantee is will depend on the guarantor's financial and credit history. The guaranteed stock arrangement has frequently been used by railroads.
Common or preferred stock whose dividends are guaranteed.