Thereâ€™s two ways for companies to raise money for business investment â€“ they can borrow it and/or they can issue shares - otherwise known as stocks. In corporate-finance-speak, stocks are called equity capital and borrowed money is debt capital. Equity (stocks/shares) differs fundamentally from debt in two ways. 1. It represents an ownership interest in a company â€“ youâ€™re buying a share of the company, not lending the company money. 2. A bondholder (basically, a lender) is entitled to a regular interest payment and can call for a winding up of the company if interest isnâ€™t paid. An equityholder is not entitled to any regular payment â€“ (although most stocks provide for the payment of a cash dividend this is at the discretion of the companyâ€™s management). So, buy a stock and youâ€™re buying part-ownership of a company. And as an owner, you take a share in the companyâ€™s future profits.
Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred stockholders have ownership rights, but the preferred normally has a prior claim on dividends and, in the event of liquidation, assets. Claims of both common and preferred stockholders are junior to claims of bondholders or other creditors of the company. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater reward in the form of dividends and capital appreciation.
Unit of ownership of a public corporation. The vast majority of stocks traded on the exchanges are common stocks (as opposed to "preferred stock"). Typically, common stock owners are entitled to vote on company directors and important policy matters, and may also receive dividends from the company. (Also see preferred stock.)
a type of security representing ownership rights in a company. Usually, company founders, management and employees own common stock while investors own preferred stock. In the event of a liquidation of the company, the claims of secured and unsecured creditors, bondholders and preferred stockholders take precedence over common stockholders. See Preferred stock.
"Investors who purchase common stock have voting rights at the company's annual stockholders' meeting. Common Stockholders are not guaranteed dividends, buy they expect to receive higher dividends during the company's prosperous periods. If a company fails or liquidates, common stockholders are paid, after bondholders and preferred stockholders. "
Shares in a company which have full voting rights which the holders use to control the company in common with each other. There is no fixed or assured dividend as with preferred shares, which have first claim on the distribution of a company's earnings or assets.
( Shares): Units representing ownership of a corporation. If the company is liquidated, the claims of its creditors and owners of bonds or preferred stock take precedence over the common stockholders; common stock usually has more potential for appreciation.
Units of ownership of a corporation. Common stockholders are typically entitled to vote on the selection of directors and other matters. Distinguished from "preferred stock," which generally has more favorable dividend and liquidation rights, although more limited voting rights.
Shares of stock representing ownership of a corporation. Common stockholders are generally entitled to receive dividends after bondholders and preferred stockholders have received interest and preferred dividends. Common stockholders are usually entitled to vote in deciding company affairs.
The physical representation of a pro rated ownership in a company, with full voting rights in the running of that company. It may be public stock bought and sold on a stock market exchange, or private stock that is non-liquid and can only be sold to other private parties, usually requiring the permission of the company issuing the stock.
stock other than preferred stock; entitles the owner to a share of the corporation's profits and a share of the voting power in shareholder elections; "over 40 million Americans invest in common stocks"
Common stocks are securities that represent an ownership stake in a company. Ownership of such stock gives investors a share of the company's profits either through capital appreciation, if the company does well, or through dividends and allow investors to vote on certain issues that the company faces. Holders of common stock shares, however, are last in line in terms of their claim to dividends, assets, etc.
An equity share in the ownership of a company. There is no guarantee that the money paid for the stock will be returned or that there will be any dividends paid. Common stockholders are last in line if the company is unable to pay its obligations.
Units of ownership in a public company for which the holders can typically vote on matters pertaining to the company and receive dividends from the company's growth. Common stockholders are the last to receive assets if the company liquidates.
Common Stock is a way for an investor to own a share of a specific company, like Disney, McDonalds, or Microsoft. Owners of common stock can vote at shareholder meetings and may be paid dividends on a regular basis.
Common shares of a company that represent ownership in that company. As a group, this class of shareholder can exercise control and enjoy any capital appreciation. However, in the case of liquidation, they are junior to all other classes of securities.
Class of corporate stock, which represents the residual ownership of a corporation. Holders of common stock have voting powers in the corporation and participate in the profits of the corporation by way of dividends, but only after preferred stockholders have been paid their dividends.
Securities that represent ownership in a corporation. Common Stock is the one type of security that must be issued by a corporation. The two most important stockholder rights are the voting right and dividend right. Common stockholder claims on corporate assets are subordinate to those of bondholders, preferred stockholders, and general creditors.
Shares of stock offered to the public. All investor shares of stock are common stock. Preferred stock is owned by the virtual airline corporation and is always 50% of the outstanding shares of common stock.
One of two main types of stock an investor can purchase in a company. Investors who hold common stock have voting rights at the company's annual stockholders' meeting, but are not guaranteed dividends. If dividends are issued, holders of common stock receive the distribution only after the holders of preferred stock receive the distribution.
Stock may be divided into two different "classes," one called "common" and one called "preferred." Common stock is the ordinary stock of the corporation that entitles the owner to voting and dividend rights.
Each share of common stock represents a unit of personal ownership of a corporation. Rights to vote on issues concerning the company and Board of Directors are usually attached to the shares of common stock. A corporation is not required to pay dividends on common stock, which are the stockholders' proportionate amount of earnings. | back to educate yourself
The security of a company that represents the residual economic and ownership interest in a company after payment of all other claim. Preferred stock, subordinated debt, secured debt, and general trade obligations (i.e., trade payables) get paid prior to any proceeds to common stockholders. Each share of common stock represents a proportionate interest in the company. There can be different classes or series of common stock with different voting, dividend or other rights.
Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. In the event of liquidation, common stock holders have rights to a company's assets only after bondholders, other debt holders, and preferred stock holders have been satisfied.
A security that represents equity ownership in a corporation. It provides to the holders voting rights at the stockholders meetings and entitles them to receive a share of the company's profits through dividend payments and/or capital appreciation.
Is the shareholder's equity stake in a corporation. Sometimes, there are different classes of stock that may have greater or lesser voting rights than the ordinary common shares. For many years the New York Stock Exchange only permitted one class of common stock for a listed corporation.
These are shares in a corporation that entitle the holder to a certain amount of company ownership. Common stock shareholders have voting rights, and receive dividends as the company grows. If the corporation files for Chapter 7 bankruptcy, the common stock shareholder will receive money after bondholders, creditors and preferred stock shareholders.
A security that represents part ownership, or equity, in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits, some of which could be paid out as dividends.
Shares of ownership issued by corporations to raise capital. Holders of common stock are entitled to receive dividends and to participate in some corporate decisions such as electing the board of directors.
A unit of equity ownership in a corporation. Owners of this kind of stock exercise control over corporate affairs and enjoy any capital appreciation. They are paid dividends only after preferred stock dividends are paid. Their interest in the assets, in the event of liquidation, is junior to all others.
Ownership in a corporation resulting from investment. Common stockholder rights usually include a right to vote, share in dividends, purchases additional shares, and share in cash if the corporation is liquidated.
A stock is a security that represents partial ownership of a public corporation. Stocks usually carry corporate voting rights and pay dividends out of the company's profits. Common stocks of publicly-owned companies typically trade on a stock exchange - such as the New York Stock Exchange (NYSE) - where shares are bought and sold. In the event of liquidation of the firm, common stock shareholders are paid off after bank creditors, bond holders and preferred stock holders.
A type of equity security. Common stocks represent equity ownership in a company. Common shares let an investor vote on such matters as the election of directors. They also give the holder a share in a company's profits via dividend payments or the capital appreciation of the security.
Securities that represent an ownership interest in a corporation. Shareholders have the right to vote on major decisions (usually one vote per share owned). In the event a company is liquidated, common stockholders are last in line to receive any distribution of assets. However, to offset this risk, common stockholders generally have the greatest potential to benefit from price appreciation. (See stock.)
A type of security that represents an ownership share in a corporation. Owners of common shares are typically entitled to receive voting rights and dividends. These securities generally have the greatest potential for capital appreciation, but their rights are subordinated in the event of a liquidation or bankruptcy.
Is the baseline equity of the company. In case of bankruptcy, it is entitled to all assets and cash of the company after the payment of obligations such as bank debt, corporate debt, taxes, trade creditors, employee obligations, and preferred stock. Founders and employees almost always own shares or options for common stock.
Shares of common stock represent proportionate ownership in a publicly owned company. Shareholders vote on matters concerning the company, including the election of directors, and have residual claim on all earnings and assets.
Shares held in a public company that give holders of those shares voting rights and the right to receive dividends when they are declared by the board of directors. In general, there are two types of shares, common and preferred stock. Common stock holders share in the success when a company profits; however, they are also at risk if the company falters. In the event of liquidation of the corporation, common stock has lower priority than preferred stock and bonds (debt).
Shares in a company that can offer a dividend but the rate is not guaranteed. Investors usually make money by selling stocks at higher prices than at which they were purchased. Common stock can offer a better return than bonds, or preferred stock but with a higher risk. This is true in times when the market is rising – in a bear market, bonds with a fixed rate of return may offer investors a better return.
Shares in the ownership of a corporation that are entitled to residual dividends, after bonds and preferred stock have first received interest and dividends. A common stockholder usually has a vote in deciding company affairs, including the election of a corporation's board of directors.
An "equity" security. Common stock is "ownership" of a corporation. An owner of a company's common stock is considered to have an equity position in the corporate structure of that company. Stock in a corporation that represents ownership after the payment of all corporate bonds, debts and preferred stockholders; voting rights are usually attached.
Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.
A security, issued in shares, that represents ownership of a corporation. Common stockholders may vote for the management and receive dividends after all other obligations of the corporation are satisfied.
Security representing partial ownership interest in a corporation. Ownership may also be shares with Preferred Stock, which has prior claim on any dividends to be paid and, in the event of liquidation, to the distribution of the corporation's assets. Common stockholders assume the primary risk if business is poor, and realize greater gains in the event of success. They also elect the board of directors that controls the company.
A unit of ownership of a corporation. In the case of a public company, the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in some cases receive dividends on their holdings. Investors who purchase common stock hope that the stock price will increase so the value of their investment will appreciate. Common stock offers no performance guarantees. Additionally, in the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.
A class of stock of a company that allows its holders to have a common ownership and to have residual claims on the assets of a corporation after all debts have been settled and all obligations of the preferred stockholders have been met.
the residual right to all income of the firm after interest has been paid to creditors and dividends paid to preferred stock holders. It is also a portion of the balance sheet account shareholders’ equity representing the par value of the firm.
One of two types of stock an investor may purchase in a company. Most stock is common stock. Investors who purchase it have voting rights at the company's annual stockholders' meeting. Common Stockholders are not guaranteed dividends, buy they may receive higher dividends during the company's prosperous periods. If a company fails or liquidates, common stockholders are paid after bondholders and preferred stockholders. (see Preferred Stock)
Owners of this kind of stock exercise greater control, and therefore benefit more from dividends and capital appreciation, than owners of preferred stock or bonds. They are paid, however, only after preferred stock and bondholders, and their interest in the assets in the event of liquidation is junior to all others.
Represents part ownership of a company. Holders of common stock have voting rights but no guarantee of dividend payments. In the event that a corporation is liquidated, the claims of owners of bonds and preferred stock take precedence over those who own common stock. For the most part, however, common stock has more potential for appreciation.
Common stock represents equity (ownership) in a corporation.Â Stockholders are normally the only group to participate in the increased earnings a company may experience, via increasing dividends paid to stockholders. Upon liquidation, stockholders own any residual after creditors (including bondholders) are paid.
A class of stock issued by a corporation. It is the most frequently issued type of stock. It carries with it a voting right, however is secondary in priority to preferred stock in dividend and liquidation rights.
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 bond holders, preferred shareholders, and other debt holders have been paid in full.
Certificates evidencing ownership of a corporation and generally giving the stockholder voting rights. Common stockholders have rights inferior to those who hold the corporation's bonds, preferred stock and other debts.
Securities which represent an ownership interest in a public corporation. Owners are entitled to vote on the selection of directors and other important matters as well as to receive dividends when they are declared. If a corporation is liquidated, the claims of secured and unsecured creditors, bondholders and owners of preferred stock have priority over the claims of common stockholders.
An equity asset that represents an ownership share in a corporation and that usually entitles the owner to vote on the selection of directors and on other important company matters and also entitles the owner to receive dividends on the stock. Contrast with preferred stock. See also dividend and equity assets.
Represents ownership in a public corporation. Owners typically are entitled to vote and receive dividends. These securities generally have the most potential for capital appreciation, but their rights are subordinated in the event of a company liquidation or bankruptcy.
Common stock represents units of ownership in corporations.Â Owners typically are entitled to vote on the selection of directors and other important matters, as well as to receive dividends (if paid) on their holdings.
Common stock, also referred to as common or ordinary shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. The other type of shares that the public can hold in a corporation is known as preferred stock. Common stock that has been re-purchased by the corporation is known as treasury stock and is available for a variety of corporate uses.