What Is The Difference Between Preferred Stock And Common Stock?
most investors are familiar with common stock, but many know little about another form of company ownership, preferred stock. what are the differences? the biggest distinction is that preferred stocks offer investors an added ? of protection. if the company becomes financially insolvent, preferred stock holders have a claim on assets before common shareholders do. preferred shares also offer greater income security, when a company is on relatively stable footing. unlike common shares, preferred stocks pay set dividends at regular intervals. if the company can't make a payment during a particular period, it must pay the preferred dividend ? before any dividends are given to common shareholders. as with any investment vehicle, preferred shares have their drawbacks and their advantages. one downside is that they are not voting shares, which gives holders virtually no control over the company's management. perhaps more importantly, their predictable payouts mean they trade at a stable price, leaving little chance of getting a large capital gain. in some ways, preferreds are more like bonds than common shares. in fact, ? for financial ? just like bonds even as they don't offer quite the same level of investment protection.
- investment vehicle・・・投資手段
- voting share・・・議決権株式
- investment protection・・・投資保護