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Difference between Common and Preferred Stock Name Date Institutional Affiliations Ownership in a for-profit firm is structured as ownership interests or corporate shares depending on the form of legal entity. Where the firm is a corporation, the ownership is in the form of possession of shares. It is only an ownership interest if the enterprise is a non-stock unit. The two common types of corporate stock possessions are the preferred and common stocks. The common stock refers to the residual ownership in the company. When the stockholders are paid their share, some net asset remains and forms what is referred as residual ownership. The preferred stock represents both the equity and debt. Unlike in the preferred stock, the owners of the common stock share in the corporations profit via the rising share price and increasing dividends. These are usually agreed on a joint voting by the board of directors elected by the shareholders. However, this is the last claim on company revenue and assets. Apart from enjoying fixed dividends, the preferred stock owner’s dividends must be paid before the common shareholders receive their share. Further, they receive their share of the money left before the common stock owners in cases of liquidation or bankruptcy (Carrel, 2016). The preferred stock has some disadvantages in that there is a less share price since it is based on the yield offered. There are also no voting rights for the board members. According to the December 1st, 2016 public offering, Rexnord Corporation offered a total of 7 million shares each priced at $50. This represents a twelfth of the interest. The maximum number of shares is 1,050,000. The
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