What are common stock and preferred stock and what is the difference between

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Usually, each share of common stock represents one vote, similar to electoral votes. Of course, some companies set the value of one share to be equal to more than one vote, and sometimes less (some company shares are worth ten votes). On the contrary, holders of preferred shares do not have the right to vote on important corporate decisions.

The most important characteristic of preferred shares is Chinese Europe Phone Number List obtaining amounts of dividends on a regular basis and in amounts greater than those received by holders of ordinary shares. The second most important advantage enjoyed by holders of preferred shares is priority in obtaining their financial dues in the event of the liquidation of the companies that own their shares. This is not the case for holders of common shares. Holders of common shares do not receive the amounts they invested in their shares in the event of liquidation of their companies and are not entitled to claim them.



Finally, preferred stocks are characterized by stable value. This means that they are not subject to a sharp decline or significant increase in their value. This is due to the reliance of investors who own shares on the method of distributing profits to make a profit from these shares instead of relying on capital gains, which makes the movement of buying and selling these shares less than that which takes place on ordinary shares. Conclusion We have prepared this article to serve as a guide that you can use to guide you in the field of investing in stocks. This field is not as complex as some try to portray it, but it requires an appropriate amount of research and knowledge to be able to enter into it and clearly understand the working mechanisms within it.