Final answer:
Preferred Stock comes in various types such as Convertible, Cumulative, Callable, and Participating, each with unique features. Decisions about issuing stock, paying dividends, or reinvesting profits are made by the board of directors for both private and public companies.
Step-by-step explanation:
The types of Preferred Stock mentioned: Convertible Preferred Stock, Cumulative Preferred Stock, Callable Preferred Stock, and Participating Preferred Stock have distinct features. Convertible Preferred Stock can be converted into a predetermined number of common shares. Cumulative Preferred Stock ensures that if any dividends are missed, they are accrued and paid out to shareholders before dividends are paid to common shareholders. Callable Preferred Stock can be called back by the company at a set price after certain conditions are met. Lastly, Participating Preferred Stock allows shareholders to receive higher dividends if the company achieves specific financial goals.
As for who makes the decisions about when a firm will issue stock, or pay dividends, or re-invest profits, it differs for private and public companies. In private companies, these decisions are typically made by the company's owners or its board of directors. In the case of public companies, these decisions are made by the board of directors and are influenced by the shareholders' interests.