>

Stocks Stock Basics There are two kinds of stock issued by companies: Common stock Common stock allows investors to participate in the ownership of the company and in a share of any distributed company profits. Shareholders have the right to vote on matters of corporate policy and the right to elect members of the board of directors. In the event that a company is liquidated, common stockholders do not receive any assets until all creditors, bondholders, and preferred stockholders have been satisfied. Preferred stock Preferred stock pays a specified dividend that is set when the stock is issued. Preferreds generally pay less income than bonds of the same company and don't have the price appreciation potential of common stock. They appeal mainly to corporations, which receive a tax break on the dividend income. < PREVIOUS NEXT > #38599