What is the difference between preferred shares and common shares of a company?

1 ANSWERS

1. Kuljit Grewal
   

   Preferred stock differ from common stock in a couple of ways. First and foremost, when it comes to payouts from the company; whether in good times (dividends and profit sharing) or bad times (liquidating assets) preferred shareholders are required to be paid first as compared to common shareholders. Also, dividends for preferred shares are much more steady, being paid at regular intervals. Common shareholders only receive dividends when the company's board of directors decides it will be so. Last but not least, preferred shares can be set up to have more votes or voting rights as compared to common shares meaning that their holders have more control over the company they are invested in.

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