Types of Stocks: Preferred

In the last post I introduced the types of stocks, common and preferred, and went more in depth about common stocks. In this post I’ll be going over preferred stocks. Preferred stocks represent a partial level of ownership in a company but usually doesn’t contain the same voting rights as common stocks- this varies for each company however. With preferred stocks you often are promised a fixed dividend forever. Like I mentioned in the last post, preferred shareholders are close to the top of the list when getting paid in cause of bankruptcy or liquidation. This type of stock is often described as callable, which means that at anytime, the company can call a shareholder and buy back that share.

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