Types Of Stocks
Stocks can be broken up into 3 categories; common stock,
preferred stock, and class stock. Common stock makes up the majority of
stocks. As a common stock holder, you have a right to claim dividends and get
to have one vote per share when electing board of directors.
Preferred stock do not come with the same voting rights but
comes with a guaranteed fixed dividend. This is different from common stock
because common stock’s dividend is never guaranteed. So in reality, preferred
stock is more like a bond, which pays out a return.
Companies sometimes issue different classes of stock.
Usually this is done to differentiate voting rights to different classes. One
class might be entitled to 5 votes per each share while the other class is the
normal 1 vote to each share. Class A and Class B are the typical designations.