Common Stock
A 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". Investopedia Says:
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. Related Terms:
Board Of Directors
Bond
Cashless Conversion
Common Shareholder
Discount For Lack Of Marketability - DLOM
Liquidation
Marketable Security
Ordinary Shares
Preferred Stock
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