Proffered and Common shares are always a matter of great confusion between those who are interested in buying the shares. It is a decision between greed and wanting more and more between contentment to just a specific amount but at the same time it is a grand gamble where the contentment might repent once the risk of greed wins by big profits. The companies no matter how large or small they are majorly search for the shareholders and investors so that they can provide the best outcome and get the sale ratio which they want or something even more than that. That is the place where the preferred shares and common shares step in.
It is very easy to get confused in the decision but the task can become very easy if one thinks logically. The leap of risks is for those who are capable of taking them and are not afraid of losing the entire amount so that even if they go in loss they have a backup plan. Such are the people who can take the common shares but for those who cannot bear any fluctuations especially those fluctuations which take them downwards, such people should take the preferred shares.
There are pros and cons of both options but once the decision is made it become very easy to accept the conditions which are with it. The common shares are known as the risky one but at the same time they can also be life changing. The every first benefit of the common shares is that it provides the right to vote or the right of opinion in the company’s matter to the share holder while this advantage is not available for the preferred share holder. It depends on the profit of the company that how much a common share holder will get. If the launch is a huge success the definitely the share holder will soon be playing in riches but at the same time if the luck is not at the side then the same person can be rolling in cheap coins.
The situation is quite opposite for the preferred share holder. The person gets a decided amount of profit no matter what the condition of the company is. There is no much risk but at the same time neither is there any hope for bigger profits then what’s decided. Even if the product is a great hit, a preferred share holder will only get the amount which is decided but at the same time if the product is a flop then this is the situation when the preferred share holder is at an advantage than common share holder since he will still get the same amount of money.
The preferred shares give stability to the share holder while the common shares offer an adventure and risk for the share holder. The preferred share holder still can lose it all if the company goes bankrupt but still the clauses of the policy includes the point that the share holder will be paid once the company owner has the money to return his debt. The time to return that debt can be decided or not and that is where the risk lies but there is no business where there is no risk.
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