COMMON STOCK Meaning and
Definition
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Common stock is a type of equity security that represents ownership in a corporation. Also known as ordinary shares, it is the most frequently traded form of stock in the financial markets. Common stockholders have the right to vote in corporate matters, such as electing the board of directors and on other important decisions that may affect the company.
Besides voting rights, common stockholders have the right to receive dividends, which are typically distributed from the company's profits. These dividends are not guaranteed and may vary depending on the company's financial performance and dividend policy. Common stockholders also have the potential to benefit from capital appreciation, meaning they can profit from an increase in the market value of their shares.
One key characteristic of common stock is that it represents residual ownership in a company. This means that in the event of liquidation or bankruptcy, common stockholders rank after debt holders and preferred stockholders in terms of claims on the company's assets. Consequently, common stock carries a higher degree of risk compared to preferred stock or debt securities.
Common stock can be bought and sold on public stock exchanges or traded in the over-the-counter market. The price of common stock fluctuates based on market forces such as supply and demand, company performance, industry trends, and general economic conditions. Investors often consider common stock as a long-term investment and may utilize it as a means to participate in the growth and profitability of a company.
Common Misspellings for COMMON STOCK
- xommon stock
- vommon stock
- fommon stock
- dommon stock
- cimmon stock
- ckmmon stock
- clmmon stock
- cpmmon stock
- c0mmon stock
- c9mmon stock
- conmon stock
- cokmon stock
- cojmon stock
- comnon stock
- comkon stock
- comjon stock
- commin stock
- commkn stock
- commln stock
- commpn stock
Etymology of COMMON STOCK
The term "common stock" originated from the Middle English word "cummune" or "comoun", which came from the Old French word "comun". It ultimately traces back to the Latin word "communis", meaning "shared" or "common". The word "stock" in this context refers to the ownership shares or capital of a corporation. Therefore, "common stock" refers to the shares of a company's ownership that are held by the general public and have common rights, such as voting and profit sharing.
Similar spelling words for COMMON STOCK
- common ax,
- common chord,
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- coming back,
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- common shrew,
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- Common Mugwort,
- communist,
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- communisation,
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- common oak,
- common scold,
- common seal,
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- commonsense,
- common mosquito,
- common salt,
- common cold,
- common good,
- common scoter.
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