Common Stock

Common stock is a form of corporate equity ownership, a type of security. The terms "voting share" or "ordinary share" are also used 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 (including payments in arrears) 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, such 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 usually carries with it the right to vote on certain matters, such as electing the board of directors. However, a company can have both a "voting" and "non-voting" class of common stock.

Holders of common stock are able to influence the corporation through votes on establishing corporate objectives and policy, stock splits, and electing the company's board of directors. Some holders of common stock also receive preemptive rights, which enable them to retain their proportional ownership in a company should it issue another stock offering. There is no fixed dividend paid out to common stock holders and so their returns are uncertain, contingent on earnings, company reinvestment, efficiency of the market to value and sell stock.

Additional benefits from common stock include earning dividends and capital appreciation.

Read more about Common Stock:  Ordinary Shares

Other articles related to "common stock, common, stock":

Common Stock - Ordinary Shares
... Ordinary shares are also known as equity shares and they are the most common form of share in the UK ... The residual value of the company is called common stock ... A voting share (also called common stock or an ordinary share) is a share of stock giving the stockholder the right to vote on matters of corporate policy and the composition of the members of the board of directors ...
Comsat - History
... transaction was completed via a $49.50 per share purchase of approximately 49% of COMSAT common stock in September 1999, and phase 2 via a one-for-one tax-free exchange of Lockheed Martin common stock for the ... the COMSAT ticker symbol CQ was removed from the New York Stock Exchange ... value because of a drop in Lockheed Martin stock as the two companies struggled through complex congressional and regulatory hurdles ...
Cendant - History - Breakup
... of Cendant received as a dividend for each share of Cendant common stock held on the dividend distribution date 1/4 share of common stock of Realogy, 1/5 share of common stock of Wyndham ...
Huntington Bancshares - Huntington Preferred Capital
... Four related parties own HPCI's common stock Huntington Capital Financing LLC Huntington Preferred Capital II, Inc ... In addition to the common stock, Huntington Preferred Capital also issued 2 million shares of preferred stock, paying a quarterly cash dividend of $0.4925 per ... This stock is largely held by the same companies as the common stock, but a small fraction of the available shares are sold on the open market ...
Capital Surplus
... in excess of the par value (nominal value) of the shares (common stock) ... Taken together, common stock (and sometimes preferred stock) issued and paid plus capital surplus represent the total amount actually paid by investors for shares ... surplus on the balance sheet all funds from issuing shares will be credited to common stock issued ...

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