Common Stock

Common stock represents ownership in a corporation, giving shareholders voting rights on corporate matters and the ability to receive dividends. In the event of liquidation, common stockholders are last to receive any proceeds, after debt holders and preferred shareholders. Common stock is a primary vehicle for raising capital in public and private companies, offering investors potential for growth through stock price appreciation.

Key Takeaways

  • Represents ownership in a company with voting rights.
  • Last to receive assets in the event of liquidation.
  • Entitled to dividends based on company profitability.
  • Primary vehicle for raising capital in companies.

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