Companies sell common stock to raise long-term capital. What are the pros and cons of selling stock? Is it better to sell common or preferred stock? Why?
Common Stock : Common stock is a type of security that represents ownership of equity in a company. Common Stock holders have rights to claim share in company’s profits and exercise control over corporate policy and management issues by participating in the elections of the bords of meeting(BOD). Common stock holder have voting right
Preferred Stock : This is also type of a security which is separate from Common Stock and have specific rights that aren’t available to common shareholders such as receive dividends before common stock shareholders that means first paid to preferred and any dividends left over will go to the common shareholders. They have no voting right. In liquidation preferred stockholders have prority before common stock to claim company's assets and earnings.
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