💼 Common vs. Preferred Stock 💼
There are two main types of stock: common and preferred.
💼 Common stock usually entitles the owner to vote at shareholders' meetings and to receive any dividends paid out by the corporation.
💼 Preferred stockholders generally do not have voting rights, though they have a higher claim on assets and earnings than the common stockholders.
For example,
Owners of preferred stock (such as Larry Page) receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.
💼 Companies can issue new shares whenever there is a need to raise additional cash.
💼 This process dilutes the ownership and rights of existing shareholders (provided they do not buy any of the new offerings).
💼 Corporations can also engage in stock buy-backs which would benefit existing shareholders as it would cause their shares to appreciate in value.
Adam Hayes
@FinancialFreedomMagazine
There are two main types of stock: common and preferred.
💼 Common stock usually entitles the owner to vote at shareholders' meetings and to receive any dividends paid out by the corporation.
💼 Preferred stockholders generally do not have voting rights, though they have a higher claim on assets and earnings than the common stockholders.
For example,
Owners of preferred stock (such as Larry Page) receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.
💼 Companies can issue new shares whenever there is a need to raise additional cash.
💼 This process dilutes the ownership and rights of existing shareholders (provided they do not buy any of the new offerings).
💼 Corporations can also engage in stock buy-backs which would benefit existing shareholders as it would cause their shares to appreciate in value.
Adam Hayes
@FinancialFreedomMagazine