Sunday, September 23rd 2018


What is preferred stock vs common stock?

Interesting Question?   (7)   (5)

Answers (1)

2nd Nov 2009 by JonB

Preferred stock refers to an equitable share in a company that receives priority over the common stock. The holders of preferred stock are a higher priority when it comes to paying dividends. Each company is different, but preferred stocks usually pay dividends, and while common stocks may pay dividends as well, all the dividends of the preferred stocks must be paid before any dividend on the common stock is. If the company goes bankrupt, those holding preferred stock will have to all be paid before any one holding common stock.

Because preferred stocks usually pay dividends, their value doesn't fluctuate as much as that of the common stock. This can be a good thing as you can usually count on the dividend coming in, but if the company grows rapidly its likely the the value of the common stock will rise much faster than that of the preferred stock. Of course, the converse is also true.

Like This Answer?   (0)   (0)
This answer is the subjective opinion of the writer and not of

19th Oct 2009 In Stocks 1 Answers | 581 Views
Subjects: common stock, preffered stock, stock,

Answer This Question / Give Your Opinion
What is preferred stock vs common stock?

Answer: *

What country is this answer relevent to? *
Your Name: *

Enter Verification Number: *

Give Your Opinion
What are the different types of CBA credit cards?
Share a simple answer to help inform others:
Specific to any country?
First name / Alias

• Your answer will be posted here:
What are the different types of CBA credit cards?
Unanswered Questions in Stocks
What are shares?
How to buy shares?
Who controls the stock market?
Who regulates the stock market?
What is a corporate stock issue?

Answered Questions in Stocks
How many shares can i buy?
What is an IPO?
When to invest in the stock market?
How to track stocks?
What are small cap stocks?
Ask A Question
Get opinions on what you want to know:
Specific to any country?