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Corporations generally issue both common stock and preferred  stock.  Explain the major differences between these two categories.

Corporations generally issue both common stock and preferred  stock.  Explain the major differences between these two categories.

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Difference between preferred and common stock .

Owenership : Common stock holder are owner of the company. Preferred share holder have not the complete ownership but in certain cases they can get ownership.

Risk- Common stock holder has higher risk compared to preferred stock holder

income - Common stockholder get the dividend and capital appreciation as income from investment. Preferred share holde rrecieve the dividend which is typically fixed (some time higher in case of participating preferred stock).

Voting right - Common holder has the right to vote. Preferred has no right (except in certain cases) to vote

liquidation priority - first preferred shareholder will get paid and than any thing left common shareholder will get the share .

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