A perpetual preferred stock that pays a fixed dividend. The fixed dividend rate is set at a fixed monetary amount or a percentage of its par value (par value of the stock) as defined on its certificate. The dividend rate of this stock is predetermined and will not experience any changes over time. For its entire term, this stock pays a fixed dividend.

Perpetual preferred stock has no maturity date. Dividends are typically noncumulative, and only payable when and if declared by the issuer’s management. These securities rank above the issuer’s common stock and are subordinated to the issuer’s outstanding senior unsecured debts.

Fixed rate perpetuals offer investors a stable income stream and typically pay a higher dividend upon their issuance with respect to other types of preferred stocks, from the same issuer. This aims to compensate the holders for non-existence of a maturity date, where the dividend rate is locked into perpetuity.