How Do You Spell COMMON SHARE?
Pronunciation: [kˈɒmən ʃˈe͡ə] (IPA) 
Pronunciation: [kˈɒmən ʃˈe͡ə] (IPA)
A common share refers to a type of security that represents ownership in a corporation or company. Common shares, also known as common stock, grant shareholders certain rights and privileges within the organization. These shares typically grant voting rights at general meetings, allowing shareholders to participate in decision-making processes and have a say in the company's affairs.
Furthermore, common shares provide shareholders with the opportunity to receive dividends, which are a portion of the company's profits distributed to shareholders. Dividends are paid out after the company covers its expenses, debts, and other obligations. However, the payment of dividends is dependent on the company's financial performance and the decision of its board of directors.
Common shares also come with a certain level of risk. If a company faces financial hardships or goes bankrupt, common shareholders are at the bottom of the priority list when it comes to distributions from the company's assets. They have a residual claim on the company's assets, meaning they will be paid after all other obligations, such as debts to lenders and preferred shareholders, are fulfilled.
Investors often purchase common shares in the hopes that the company's value will increase, allowing them to sell their shares at a profit. Common shares are typically traded on stock exchanges, where their prices fluctuate based on market demand and the performance and perceived potential of the company.
The word "common" in the term "common share" comes from the Latin word "communis", which means "shared" or "belonging to all". The term "share" originates from the Old English word "scearu", which means "division" or "portion". Thus, the etymology of "common share" implies a part or division that is shared by multiple individuals or entities. In finance, a common share refers to a unit of ownership in a company that gives the holder certain rights, such as voting rights and a stake in the company's profits.
