what is the difference between preferred shareholders and ordinary share holders?

Question

the question is in relation to shares or shareholders.

Answer 1

preferred shares
Definition

Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Like common stock, preferred shares represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, a preferred share pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred share is that the investor has a greater claim on the company’s assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock: cumulative preferred, non-cumulative, participating, and convertible. also called preferred stock.

Answer 2

Gosh is right. The bottom line is this -- if the firm pays out dividends in any period, preferred shareholds will get paid dividends first -- they get first dibs on the pie.

If the firm goes belly up, they are ahead of common shareholders -- but behind just about everybody else -- in getting a share of the dead body (the firm's assets).

Preferred shares usually trade at a higher price for these benefits, compared to common shares.

Answer 3

common stock holders are
the last to be paid when a corporation is liquidated
they have voting rights
they are riskier so they are more profitable
dividend amount is unpredictable

preferred stock
dividend amount is set
they have very limited voting rights
they have an inverse property( when interest rates go up , preferred prices go down)
there are about 6 types
callable- can be repurchased by the issuer usually at a premium
straight preferred
adjustable rate preferred- interest rate tied to another benchmark rate i.e. treasury bill
participating- get additional percentage of remaining company profit
convertible-can be changed into common stock at a set price
cumulative- missed dividends are paid in arrears

Answer 4

Preferred shares are a special kind of stock & gives dividends, whereas the ordinary shares do not.

Answer 5

Those who hold the most shares are preferred.