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What does it mean to own a stock? You may know that a stock is an investment and that it can go up or down, but there is more to owning a stock than that. When you own a stock, you own a fraction of the company. If it is just one stock, then it is likely an incredibly small fraction, but institutional investors and even some individuals may accumulate enough stock in a company to own a significant portion of the company. It is important for you, as a shareholder of the company, to understand that you may be entitled to certain privileges, such as voting rights or dividends. Additionally, there are different types of stocks (e.g., common and preferred), and you should understand the difference between them before making an investment decision in a company.
For this Assignment, you will explain the differences between common stock and preferred stock, as well as explain other aspects of common stocks, such as potential total return and valuation. You will describe how dividends affect stocks and their total returns.