How does preferred stock differ from common stock?

Preferred stocks are those that give certain advantages over the holders of common stock known as the preferred stock. These advantages include payment of dividends before stock holders, payment of assets before common stockholders at the time of liquidation, etc.

The primary difference between preferred stock and common stock is that prefered stock provides no voting rights to stakeholders, whereas common stock provides the right. Preferred stakeholders have priority over a corporate's revenue; they are paid dividends before common stockholders.

Preferred stocks are issued rarely by the corporation, in comparison with the common stock. The assets that are liquidated at that time liquidation are paid first to the preferred stockholders before the owners of the common stocks.