How is Preferred Stock Different from Common Stock?
There are several key differences between preferred stock and common stock:
Voting Rights: Common stockholders typically have voting rights, while preferred stockholders usually do not. Dividend Payments: Preferred stockholders receive dividend payments before common stockholders and often at a fixed rate. Claim on Assets: In the event of liquidation, preferred stockholders have a higher claim on assets than common stockholders but are subordinate to debt holders. Price Stability: Preferred stock prices tend to be more stable than common stock prices due to their fixed dividend payments.