See Also:
Owner's Equity
Intrinsic Value - Stock Options
Company Valuation
Basis Definition
Balance Sheet
Paid in Capital (APIC)
Capital Gains
American Depositary Receipts (ADRs)
Common Stock Definition
Shares of common stock represent ownership of a public or private corporation. Shares of common stock usually give the shareholder voting rights. This means the shareholder can vote on matters of corporate policy and the selection of members of the
board of directors. The more shares an investor owns, the more influence that investor has on the company.
Shares of common stock typically trade on financial exchanges and their values fluctuate according to the company’s performance and the market’s perceptions of the company.
If a company goes out of business and liquidates its assets, the common stockholders are the last ones to get their invested capital back. Bondholders and
preferred stock holders are reimbursed before common stockholders.