Stock Valuation is long-term sources of equity financing by issuing common and preferred stock. The common stockholders are the owners of the firm. They have the right to vote on important matters to the firm such as the election of the Board of Directors. Preferred stock, on the other hand, is a hybrid form of financing, sharing some features with debt and some with common equity.he priority of the claims against the assets of the firm belonging to debt holders, preferred stockholders, and common stockholders differ. The owners of the firm’s debt securities have the first claim against the assets of the firm.