Title: Identify the differences between preferred stock and common stock.
Course: Accounting, Advanced (12104-II) > Section: Implementing Accounting for a Corporation

Identification should include a differentiation that focuses on:

- Preferred stock guarantees regular dividend payments for a specified time and is therefore less risky.
- Common stock does not guarantee regular dividend payments.
- Preferred stockholders are entitled to assets of a liquidated business before holders of common stock.
- Common stockholders have a vote in the operation of the corporation, while holders of preferred stock do not.