Your Rights as a Shareholder

Let’s say you just bought stock in AT&T. As a part owner of the company, can you call your long-distance relatives for free during the holidays? And never mind the dividends, why is it that Apple

The Rules of Absolute Priority

Every company has a pecking order of rights that accompanies the three main classes of securities: common stock, bonds, and preferred stock. To understand the priority of each security, let’s examine company bankruptcy. Unfortunately, in this case, common shareholders are the corporate equivalent of a vulture that eats only after the lions and hyenas have had their share. Because creditors put up the original money to get the company started, they’re first in line for the company’s assets. Next come bondholders, preferred shareholders, and finally the common shareholders.