Final answer:
Preferred stock typically has a par value, while common stock might not. Investors look for a return on investment through dividends or capital gains, like buying stock at one price and selling at a higher price.
Step-by-step explanation:
Preferred stock generally has a par value. However, common stock may or may not have a par value. When a firm decides to issue stock, investors expect a rate of return which can come in the form of dividends or capital gains. For example, an investor might buy stock at a certain price and then sell it at a higher price, the profit they make is known as a capital gain. This concept is crucial in understanding the value proposition of different types of stock investments.