Common and Preferred Stock
The rights and of a stockholder vary according to the type of stock held.

The two main stock are called common and preferred. loss or gain can be greater with common stock than with preferred stock. Holders of common stock have residual equity in a ; that is, they have the last claim on the earnings and assets of a company, and may receive dividends only at the of the company's board of directors and after all other claims on profits have been satisfied. For example, if the company is dissolved, stockholders share in what is left only after all other claims have been settled. Dividends and equity by common stocks have no fixed dollar value; holders of such stock, therefore, more from a company's prosperity or lose more from a company's adversity than do holders of preferred stocks.

If a stock has preferred dividends, the owner is entitled to receive a fixed dividend rate before any dividends are to other stockholders; if a stock has preferred assets, the stockholder receives a share of the from the dissolution of a company before holders of nonpreferred stock do. Some stocks have both preferred dividends and preferred assets. Stock with first preference in the of dividends or assets is called first preferred or sometimes preferred A, the next is called second preferred or preferred B, and so on.

Although holders of preferred stock may have to forego a dividend during a of little or no profit, this is not true for two types of preferred stock. One is cumulative preferred stock, which entitles the owner to cumulation of past-due and unpaid dividends; the other is protected preferred. When the latter is , the , after paying the preferred-stock dividends, places a of its earnings into a reserve, or sinking, in order to payment of preferred-stock dividends.

Two other stock are redeemable stock and stock. The former is preferred stock with the stipulation that the has the right to repurchase it. The latter stock endows the stockholder with the of exchanging preferred stock for common stock under conditions, such as when the common stock reaches a certain price, or when the preferred stock has been held for a particular time.

Although most stockholders have the right to vote at their meetings, thus in management, some stocks this. Although such nonvoting stocks may be among any of those mentioned, at least one kind of stock by a must be endowed with the voting privilege. Voting stock may not be changed to nonvoting stock without the stockholder's . vetoing stock is between voting and nonvoting stock; its holders may vote only on questions. Before voting by proxy was permitted, independent stockholders influenced the management of a company. After it was authorized, however, company managers and directors holding a stock enough proxies from absentee stockholders to outvote any opposition, thus perpetuating their control.