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If you had the choice to purchase common stock or preferred stock from your company, which...

If you had the choice to purchase common stock or preferred stock from your company, which would you choose? Why? Which is more risky? Which is the better deal? Your opinion should be based on your research and cited.

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Answer #2

Prefence share Holder will have preference over Common stock aholder at the time of payment of dividend as well as repayment of capital at the time of liquidation of company.

The Prefence share holder will get the fixed income, Where as Common stock holder income depending on the decision of directors.

It is not mandatory to pay the dividednd to Common stock holder.

If you want More Return, As well as you are able to take more Risk - It is advicable to take COmmon stock else Prferred stock is adviceable.

answered by: anonymous
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