Stocks Question

Question

Which is better, common stock or preferred stock?

Answer 1

1. Preferred Stock is less volatile in comparison with common stock due to less potential for profit.
2. Preferred Stockholders do not have voting rights while common stockholders have voting rights.
3. Preferred Stockholders do not have right to participate in Annual General meetings while Common stockholders have right to participate in Annual General meetings .
4. Fixed rate of dividend is given to Preferred Stockholders while rate of dividend is not fixed for common stockholders.
5. Preferred Stock is redeemable while common stock is not redeemable.
6. Preferred Stock can be converted into common stock while common stock can not be converted into Preferred Stock.
7. Preferred stockholders are paid before common stockholders receive dividends.