33.5
5.What is the difference between preferred stock and common stock?
(3)
Preferred stock is slightly higher priority than common stock. Preferred stock has a promised fixed dividend and can usually be valued as a perpetuity. It is sort of like a perpetual bond. Common stock has no promised dividend and all dividends owed to preferred stockholders must be paid before common stockholders get any dividends. However, the advantage of common stock is that they are the primary beneficiaries of any success that the company enjoys.