A corporation can issue different types of stock to its shareholders. Common stock is the most basic type of stock. The owners of common stock generally possess voting rights and rights to dividends if and when declared by the company’s board of directors. Preferred stock, on the other hand, usually has specific preferred characteristics, such as special rights to dividends ahead of common stockholders or special status to receive payments if the company is ever liquidated before holders of common stock receive any payments. Issuing preferred stock is a procedure often used by a company to entice new investors to buy shares by offering them specific preferences or benefits not available to common stockholders.