After learning about the notion of
stock, now we will discuss about the types of stocks. Apparently not all of the
same stock. There are two types of shares, namely Common Stock and Preferred
Stock. Any difference between the two types of shares? Read this article
further.
Commonly known to the public stock
is common stock, but there are actually two types of shares, namely:
COMMON
STOCK
Ordinary shares are shares that put
the most recent owner of the distribution of dividends and rights to assets of
the company if it liquidated. This is due to the common stock owners do not
have special privileges. The owners of ordinary shares will not obtain payment
of dividends during the company does not earn a profit. Each shareholder has
voting rights in the general meeting of shareholders / GMS with the provisions of
one share one vote. Holders of ordinary shares have limited responsibilities to
the claims of other parties for the proportion of shares and have the right to
transfer its ownership to another person.
PREFERRED
STOCK
Preferred stocks are stocks that
have the characteristics of a combination of bonds and common stock, because it
can generate a fixed income (such as interest on bonds). This is due to get the
right distribution of dividends regularly. There are three characteristics of
preferred stock that make it similar to bonds: no claim on earnings and assets
previously, dividends remain for the duration of the shares, and has the right
to redeem and can be exchanged for common shares.
Read Also What is IPO?
The advantages of preferred stock is
safer than common shares. Because the preferred shares have the right to claim
against the company's assets and the distribution of dividends in advance,
however the preferred stock has a weakness that is difficult for bought and
sold like common stock, because the numbers are small.
How
to Differentiate Common Shares and Preferred Shares
In the Indonesia Stock Exchange, is
easy to differentiate between Common Shares and Preferred Shares. The trick
view stock code. Stock code is always comprises four letters. If there is an
additional one letter P means that the shares are Preferred Stock.
