Question

Explain the difference between common and preferred stock? List the advantages and disadvantages of each.

Answer 1

Common Stock :

→Common stock is the most common type of stock that is issued by companies.

→ Have voting privileges, whereas holders of preferred stock may not.

→ Most common stock gives owner one vote per number of shares owned.

Preferred Stock :

→ Preferred stock is generally considered less volatile than common stock.

→ Preferred stockholders generally do not have voting rights.

Both common stock and preferred stock have their advantages.

When considering which type may be suitable for you, it is important to assess your financial situation, time frame, and investment goals.