How are long-term bonds and preferred stock similar, and different from one another?

Question

I need this info for an assignment. Thank you.

Answer 1

Preference Shares will outrank ordinary shareholders (most common type of shares) should a company wind up. They carry no voting rights usually and also allow a preference in dividend payments should one be paid. These would usually cost more than ordinary shares due to better “guarantees”.

Bond holders would get paid out firstly and thereby offer greater security although capital is still at risk. These would produce income by ways of coupons (interest) and also chance for capital growth.

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Answer 2

1. similiar.  the "preferred stok" is kalled "stok" kauz it is permanent.  Bonds gotta hav an end date.

big konfuze is that "preferred stok" is NOT like kommon stok.

It pae fixed % interest like a bond.  Market pries go up & down

based on market rates.

2. But the "permanent" mae not be.  Kumpanee kan kall in stok.