There are two types of equity including common shares and preferred shares. Equity is issued to raise the funds for the company and there are different characteristics for the two types of equity. Common shares equity give rights of ownership rights to the shareholders and they get the right to vote through this equity type. Every year when the company earns and distributes dividends then right of common shareholders come after creditors and preferred shareholders. Preferred shareholders do not have the vote to right and they have fixed dividend rate regardless of company incurs loss or gain.
