Common Stock

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A Common Stock is an equity stock that exercise control by electing a board of directors and voting on corporate policy.



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.



  • 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.