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What is the difference between Common Stock / Preferred Stock / Bonds?

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Question added by Mohamed Hassan Abdul Moneim CMA , Financial Controlling Manager , Pharmaplast S.A.E
Date Posted: 2016/05/12
Adventinus Lambut
by Adventinus Lambut , Receiving Clerk , Rose Rayhaan by Rotana Hotels

Dear Mr. Mohamed,

Common stock is a passive ownership of the listing company at the stock market that can be hold by public. When we have 1 lot of common stock we owe portion of ownership depend on the amount of common stock issued. The common stock holder has right to get dividend accordingly to the proportion of ownership.

 

Preferred Stock is a active ownership of the listing company at the stock. This kind of stock does not offer to public, but just several people inside of the company can hold it. Because, they actively running the operation also. One of the exclusive right that given to the preferred stock holder is, priority to get dividend.

 

Bonds is obligation that given to bonds holder base on the underlying asset as the collateral. Nation as an organization also has right to issue bonds. It is just similar like borrowing money from third party but, under control of finance legal institution that has authority to manage it.

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