what type of stock receives an equal part of the profits on each share to be distributed after all other obligations of a company have been satisfied?
Kinds of Stock The main classes of stock, based on the way dividends are paid on the stock, are common, preferred, and cumulative preferred. Common stock. This type of stock receives an equal part of the profits on each share to be distributed after all other obligations of a company have been satisfied. Thus, if there are 1,000 shares of common stock, and if $5,000.00 is to be distributed to the holders of this stock, each share will receive a dividend of $5.00. If the par value of the stock is $100.00, the company may declare a dividend of 5% instead of $5.00 per share. Notice that 5% of $100 and $5.00 mean the same thing. Preferred stock.