91影视

Common stock is a kind of security that provides returns to investors in terms of dividend payment and capital gain. The dividend is a part of the net income of the company that is distributed to the investors, and capital gain arises by the sale price of a security exceeds the purchase price.

As compared to preferred stock, common stock may provide three types of dividends鈥�

1. No growth dividend

2. Constant growth dividend

3. Variable growth dividend

The preferred stock and common stock both don鈥檛 have any maturity period. So the valuation merely depends upon the dividend payment.

The preferred stock provides only one type of dividend: No growth dividend. So the dividend pattern for the preferred and common stock would be similar if 鈥淣o growth dividend鈥� is provided in both the cases.