Equities, or stocks, represent a share in the ownership of a company, and the people who hold them are called shareholders. There are two types of stocks, Common and Preferred.
Common Shares “Both public and private corporations can issue common shares. Common shareholders are the owners of a company and initially provide the equity capital to start the business.
Common share ownership in a public company offers many benefits to investors. The following are some of its main advantages:
Preferred Shares essentially have a higher claim on the company’s assets should they liquidate than common shares.
“Preferred stock is a class of share capital that generally entitles shareholders to fixed dividends ahead of the company's common shares and to a stated dollar value per share in the event of liquidation. Typically, the preferred shareholder occupies a position between that of a company's creditors and its common shareholders. If a company's ability to pay interest and dividends suffers due to poor earnings, the preferred shareholder is better protected than common shareholders but worse off than creditors.”
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