Types of Stocks

• Investors can invest in several different types of stock. Two of the most common types of stock are common stock and preferred stock. The value of common stock fluctuates depending on numerous factors. Preferred stock value generally does not change, but the shareholder is entitled to a set dividend typically payable annually, provided the corporation has enough funds to pay it without becoming insolvent.
  
  

Shareholder Rights

• Shareholder rights vary depending on the type of stock the investor owns. Common stock generally entitles the shareholder to vote in board of director elections and to receive a portion of the corporate profits. Corporations issue stocks with varying degrees of rights, including rights to receive profits before other shareholders. The type of rights bestowed by the stock can be a factor that investors consider when making a stock purchase.
  
  

Stock Values

• Stock values vary depending on whether the corporation is private or public. Public corporations trade on public stock markets like the New York Stock Exchange or the Tokyo Stock Exchange. The value of public stocks generally depend on market conditions and the business's performance. Private corporation stock is harder to value, because there is no ready market for it. If a private corporation seeks outside investors, the board of directors should consider hiring a professional appraisal service to value a particular company's stock.
  
  

Purchasing Stock

• Purchasing stock is also dependent on whether the corporation is private or public. To purchase public stock, the investor must use a broker or a brokerage service. Essentially, the investor tells the broker what stock he wants and how many shares he wants and the broker finds a willing seller. Private stock sales typically involve a written stock-purchase agreement between the investor and the private corporation shareholder.