What type of dividend pattern for common stock is similar to the dividend payment for the preferred stock?

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–

1. No growth dividend

2. Constant growth dividend

3. Variable growth dividend

The preferred stock and common stock both don’t 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 “No growth dividend” is provided in both the cases.