Stock shares represent an equity (ownership) interest in a corporation and entitle the holder to a claim on corporate assets and earnings. Corporations issue two basic types of stock: common and preferred. Differences between the two types involve shareholder voting rights, dividend variability, price sensitivity, and the priority for payment of dividends and liquidation claims. For purposes of financial disclosure, these differences are ordinarily not significant, and there is no requirement to specify the type of stock on a disclosure report.
This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.
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