I need to write about this question: Discuss the various stockholder rights. What factor(s) make the valuation of common stock more complicated than the valuation of bonds/preferred stocks?

Question

(im so confused!!) :(

Answer 1

Here's a great article about stock holders' rights.

http://www.investopedia.com/articles/01/050201.asp

The price of common stock varies from hour to hour (minute to minute). Preferred stock and bond prices are steady.

Answer 2

In the end, looking far ahead, the value of a share of a company is the present value of a future stream of dividends. Of course people do not think much about that for most stocks, particularly those that presently pay no dividends, because there are so many other factors more immediate such as are they about to buy another company or be sold themselves or do they have a neat new product coming to market that will attract new investors and drive the price up. The company directors and managers are ultimately responsible to the owners, the stockholders though, and somewhere they should be keeping that eventual money making and distribution of profits to stockholders in mind.
The worth of bods or preferred stock is as you can see from the above much simpler. They have a dividend or interest payment now and until maturity or whatever and we can see what the present value of that is easily. The value of that only depends on two things. One: will the company fail and stop paying in bankruptcy? Or two: will interest rates in general go up and make those payments less valuable. However those drawbacks apply even more so to the common stock so the bond route is more predictable and easily valued.