Stocks symbolize a proportional stake in the issuing company, reflecting the holder's partial ownership. They are primarily categorized into common stock and preferred stock.

Take Salt Corporation as an example.

The corporation issued common stocks five years ago, giving shareholders ownership stakes with the potential to reap higher returns.

Owners of common stock are granted voting rights, allowing them to participate in the corporation's decisions.

Common stock returns are not fixed and depend on profits and management decisions. The main attraction lies in the growth potential as their price keeps fluctuating in the stock market.

As they face market volatility, common stock involves higher risk.

The corporation decides to raise further capital and issues preferred stocks. These stockholders enjoy priority in dividends and liquidation, providing a stable income.

The preferred stockholders get a share of ownership without conferring significant decision-making authority.

Preferred stock appeals to investors seeking reliability with lower risks and fixed returns.

During bankruptcy, preferred stockholders will have a claim on the Salt Corporation's assets before common stockholders.