Different Types of Stocks
Generally talking two main types of stock exists, which are common stock and preferred stock.
The most well known stock is of course a common stock. In fact, the majority of stocks are issued in this type of form. These shares simply represent assets ownership as well as a claim of profits. Investors who posses common stock shares get one vote per share and thus investors with the most shares have more influence and power. It’s worth mentioning that common stock holders are on the bottom of the priority ladder. This means that in case of liquidation, ordinary stock owners will be paid only after all other shareholders have received their claims.
Furthermore, there are two different classes of common stock. These classes are Class A and Class B. The first class, Class A, gives its owner more votes per share than comparing to the voting power of Class B owner.
Preferred stock have higher claim against company’s assets than common stock. Dividends are first paid off to preferred shares owners and then to common shares shareholders. On the other hand, these shares do not have any voting rights.