Capital Stack

Capital stack is the ordering of a company’s financing claims, commonly including secured debt, unsecured debt, preferred equity, and common equity.

Why this matters to income investors

Where a security sits among debt and equity determines its payment priority and loss exposure.

How to use capital stack in your research

Read the borrower or issuer disclosures for collateral, payment priority, covenant terms, and missed payments. Then check how a deterioration could reduce interest income or the value available to support future dividends.

This material is general education and information, not individualized investment, tax, or legal advice.