Basic Material
Types of Stocks?
Stocks can be categorized based on several criteria. Here are some common types of stocks:
Based on Asset Ownership
1. Common Stock Common stock is the most common type of stock, where the owner has voting rights in shareholders' meetings and is entitled to receive dividends if the company distributes them. However, the value of common stock tends to be more volatile compared to other types of stocks. 2. Preferred Stock Preferred stock offers advantages over common stock, such as priority in receiving dividends and claims on company assets in the event of liquidation. Although it typically does not grant voting rights in shareholders' meetings, preferred stock tends to be more stable than common stock, though it usually has more limited growth potential.
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