PREFERRED STOCK AND ORDINARY STOCK

When we talk about Apple (AAPL), Amazon (AMZN), or Coca-Cola, we all think about common stock (KO).

Shareholders of common stock have the right to vote at shareholder meetings (or remotely, through online or postal proxy voting) and to receive dividends accessible to common shareholders. The disadvantage is that ordinary shareholders are paid last, after preferred shareholders, creditors, and bondholders, if a firm goes bankrupt and is liquidated. Preferred shares frequently pay a dividend but do not have voting rights. If the firm is liquidated due to bankruptcy, it will be paid out before regular stockholders.