29
Jan
2020
There are two types of stocks
Common Stock
Preferred stock.
Common stock:
Common Stock is an investment security that represents the ownership of a company. For example, To a very close person, you say that he owns stock of a particular company then that stock is called common stock in types of stocks.
Where Total Return = Income received from investment + Any change in its value
Features of Common Stocks
The right to receive dividend payments typically from earnings. If allowed by the board of directors.
The power to sell the stock (liquidity rights) and realize capital gains on public trading markets or in private transactions. If there are willing buyers.
The right to receive consideration in a merger or other fundamental transaction. If...