Two main types of company stock

Wednesday, 14 – 10 – 2015

  1. Preferred stocks or preference shares

A preference shareholder in a company will receive a share of any profits before the holders of other types of shares. That is, a preferred stock or preference share is given preference in the payment of devidends from profit. The dividend paid is usually a fixed percentage of the face value printed on the share. Devidend rights are often cumulative, so that if a dividend is not paid in one year it accumulates to be paid in future years.



A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits“. – Wikipedia

Preference shareholders, however, are not usually allowed to vote on company policy or in the election of directors to run the company at Annual General Meetings.

  1. Common stock or ordinary shares


Most shares held in limited companies are common stock, or ordinary shares. Ordinary share holders receive a dividend from any profits remaining after preference shareholders have been paid. If no profits remain, ordinary shareholders will not receive a dividend. Holding ordinary shares can therefore be more risky then holding preference shares. However, ordinary shares carry one vote per share at Annual General Meetings. So, a person or organization that owns 10 000 ordinary shares in a company has 10 000 votes The Person or organization with the most ordinary shares in a company is the majority shareholder and can determine company policy and who sits on the board of direction



Sumber :

  1. Anonim. (2015). Dividend. (Diakses tanggal 14 Oktober 2015)
  2. Dan Moynihan & Brian Titey. (2015). Economics, A Complete Course for IGCSE and O Level: University of Cambridge International Examination.
  3. Google Pict. Percentage (Accsess on October 14,2015)
  4. Google Pict. Stock (Accsess on October 14,2015)
  5. Google Pict. Paid (Accsess on October 14,2015)


Dan Moynihan & Brian Titey. (2015). Economics; A Complete Course for IGCSE and O Level. 2015. hlm 88


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