Question: What are a few differences between common stock and preferred stock? What makes up the potential total return of a common stock that you purchase?

What are a few differences between common stock and preferred stock? What makes up the potential total return of a common stock that you purchase? Why are stocks generally more difficult to value than bonds? Why might a company choose to not pay dividends? Under what two assumptions can you use the dividend growth model to determine the value of a share of stock? Based on the dividend growth model, what are the two components of the total return on a share of common stock? Which do you think is typically larger?

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