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Kinds of Stock
| Common Stock |
The most
widely issued form of stock. Individuals purchase common stock over exchanges in the
secondary market. Typically, common stock bears voting rights for its owners, but
receive dividends only after preferred stockholders receive theirs. |
| Preferred
Stock |
Issued as
non-voting stock. Preferred stock holders generally receive some sort of periodic
dividend before any common stock holders can receive theirs. This also applies to
rights of owenership in the event of liquidation of company assets. |
| Convertible
Stock |
A security
which comes with a feature that allows the owner to exchange the security for shares of a
different kind of security. Examples:
- convertible bonds => preferred stock
- convertible preferred => common stock
- convertible bonds => common stock
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