ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The main difference between preferred and common stock is that preferred stock gives no voting rights to shareholders while common stock does. Preferred shareholders have priority over a company’s income, meaning they are paid dividends before common shareholders.

Detailed explanation-2: -Preferred typically have no voting rights, whereas common stockholders do. Preferred stockholders may have the option to convert shares to common shares but not vice versa. Preferred shares may be callable where the company can demand to repurchase them at par value.

Detailed explanation-3: -Preferred stock generally doesn’t carry voting rights. It’s issued by a company to raise capital without jeopardizing the controlling interests of the common stockholders.

Detailed explanation-4: -A preferred stock pays stockholders set dividend payments on a regular schedule, but does not have voting rights or as much potential for capital appreciation as common stock. Investors tend to buy shares of preferred stock for their consistent income and lower financial risk if a company faces losses.

Detailed explanation-5: -Convertible preferred stock is a type of preferred share that pays a dividend and can be converted into common stock at a fixed conversion ratio after a specified time.