Here to Visit our Sponsor Preferred Stock Somewhat like a bond. They pay the same equal dividends forever. Common Stock Ownership in the company. Sometimes there are dividends, sometimes not. This is easy.
Preferred stock is basically a perpetuity .
This is not easy. This is a mess. Think about it. Both the buyer and seller agree to exchange the stock at that price. We assume that they are both rational people and both know something about the company and its future plans and profit potential.