This paper outlines the special characteristics of preferred shares in Germany, notes that ordinary shares are valued at substantially higher figures, and presents a study of the pricing of both types for 58 German companies 1990-1993. Hypotheses are developed on reasons for the common share premium and an explanatory model is then applied to the data. Larger premiums are associated with higher ownership concentration and lower trading but not to the proportion carrying voting rights or the cumulative preferred dividends in arrears. They are significantly reduced if a family or financial institution is a major shareholder. Where a family is the largest blockholder the premium increases with liquidity but for a financial institution, liquidity reduces the premium. The underlying reasons for this are considered.