|
|
|
What is the difference between preferred stock and common stock?
Preferred stock is a flexible security that possesses features that make it more valuable than common stock. Preferred stock can: 1) entitle holders to proceeds before common stock upon a sale or liquidation; 2) give holders special approval rights for certain corporate events, such as charter amendments or mergers; 3) pay dividends before common stock; 4) require companies to repurchase shares, typically several years after issuance; and 5) convert into common stock with some protection from dilutive issuances of securities.
|
|
