Common Stock
A Common Stock is an equity stock that exercise control by electing a board of directors and voting on corporate policy.
- AKA: Voting Share.
- Context:
- It can be held by a Common Stock Stockholder.
- …
- Counter-Example(s):
- a Debt Security.
- a Preferred Share.
- See: Ownership Equity, Stock Dividend, Bankruptcy, Earnings Per Share, Return on Assets.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/common_stock Retrieved:2014-6-1.
- Common stock is a form of corporate equity ownership, a type of security. The terms "voting share" or "ordinary share" are also used frequently in other parts of the world; "common stock" being primarily used in the United States.
It is called "common" to distinguish it from preferred stock. If both types of stock exist, common stock holders cannot be paid dividends until all preferred stock dividends are paid in full.
In the event of bankruptcy, common stock investors receive any remaining funds after bondholders, creditors (including employees), and preferred stock holders are paid. As such, common stock investors often receive nothing after a bankruptcy.
On the other hand, common shares on average perform better than preferred shares or bonds over time.
- Common stock is a form of corporate equity ownership, a type of security. The terms "voting share" or "ordinary share" are also used frequently in other parts of the world; "common stock" being primarily used in the United States.
- http://www.investopedia.com/terms/c/commonstock.asp
- QUOTE: security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders have been paid in full. In the U.K., these are called "ordinary shares."
If the company goes bankrupt, the common stockholders will not receive their money until the creditors and preferred shareholders have received their respective share of the leftover assets. This makes common stock riskier than debt or preferred shares. The upside to common shares is that they usually outperform bonds and preferred shares in the long run.
- QUOTE: security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders have been paid in full. In the U.K., these are called "ordinary shares."
- https://secure.myubiquity.com/d401k/ecs/employee/glossary.html#18
- QUOTE: Units of ownership of a public corporation. When you own common stock in a company, you share in its success or its failure. As part owner, you vote on important policy issues such as selecting the board of directors and other important matters. If the company prospers, you may get part of the profits, called a dividend. In the event that a corporation is sold or liquidated, the claims of secured and unsecured creditors and the owners of bonds and preferred stocks take precedence over the claims of those who own common stocks. However, for the most part, common stocks have the most potential for appreciation.