Classes of shares and rights of their holders

It's common for companies to have different classes of shares, each of them conferring different rights to shareholders, such as voting power and the right to dividends or capital.

Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called “equities.”

Why do people buy stocks?

Investors buy stocks for various reasons. Here are some of them:

· Capital appreciation, which occurs when a stock rises in price

· Dividend payments, which come when the company distributes some of its earnings to stockholders

· Ability to vote shares and influence the company

Why do companies issue stock?

Companies issue stock to get money for various things, which may include:

· Paying off debt

· Launching new products

· Expanding into new markets or regions

· Enlarging facilities or building new ones

What kinds of stocks are there?

There are two main kinds of stocks, common stock and preferred stock.

Common stock (обыкновенные) entitles owners to vote at shareholder meetings and receive dividends.

Most stock that people invest in are common stock. Common stock represents partial ownership in a company, with shareholders getting the right to receive a proportional share of the value of any remaining assets if the company gets dissolved. Common stock gives shareholders theoretically unlimited upside potential, but they also risk losing everything if the company fails without having any assets left over.

Preferred stockholders (привилегированные) usually don’t have voting rights but they receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated.

The net result is that preferred stock as an investment often more closely resembles fixed-income bond investments than regular common stock. Often, a company will offer only common stock. This makes sense, as that is what shareholders most often seek to buy.