Dictionary Contents : A : Albinism
Health and Wellness Dictionary: Definition
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Also, the company may be in need of money for growth and this it takes from the small investors. The company will offer an IPO or initial public offering at this stage and this then transforms the company form a private to a public company.’
There are two kinds of stocks that the company issues and these are common stock and preferred stock.
When one refers to stocks it is basically the common stock. The majority of stocks are issued in this form. The common shareholders can claim profits on the company as well as have the voting rights.
The common stock in the long term yields higher returns than the corporate bonds. The return, however, is at a cost that is the extra risk that you take when you own the common stock. You could also lose the whole amount that you have invested. In case of bankruptcy, the common shareholders do not receive anything.
The preferred stocks are like bonds and these do not give any right to vote. The interest is guaranteed a fixed amount of dividend. This makes it different from the common stocks where the dividend amount is variable and is declared by the directors. It is also not guaranteed. In fact, there are many companies that do not pay any dividend to the common stockholders.
In the case of a bankruptcy, the preferred stockholders will be paid before the common shareholders. They, however, are lower in line as compared to the creditors. The preferred stocks can be repurchased by the company at any time for a premium. The preferred shares have characteristics somewhere between the bonds and the common shares.
The common and the preferred stocks are the two main kinds of stocks. Read full report. However, the company could also customize the stocks to fit the investor’s needs. The company wants to keep the voting right concentrated in a group and this is why it creates the classes of shares.
Lack of normal pigment in the skin, eyes, and hair.the end
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