Common Stock is an ownership stake in a company.
Preferred Stock is "Preferred as to dividends" - they come first if there are too few dollars to pay out to both Common and Preferred shareholders.
Bonds are "debt" and the bond holders get paid their interest before the Preferred and Common shareholders do.
For this reason, common stock holders carry the most risk if the company begins failing and or goes bankrupt.
People still invest in common shares because of the price appreciation potential where the value of each share "can" move higher, faster then a Bond or Preferred share. Be sure to buy shares is a stable company that is going to be around for years to come.
The same thing.
Common stock ( USA ) = ordinary share ( UK ).
Holders are last in the queue of creditors if the company liquidates, but get more if the company flourishes. Risk or return ratio is higher.
What is common stock or ordinary share? It is said that common stock Is riskier than bonds and preference shares and why people in invest in ordinary shares
