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Common stock
 
 
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Common stock is a form of corporation equity
Equity

Equity is the name given to the set of law principles, in jurisdictions following the English law common law tradition, which supplement strict rules of law where their application would operate harshly, so as to achieve what is sometimes referred to as "natural justice"....
 ownership represented in the securities
Security (finance)

A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities , and stock securities; e.g., common stocks....
. It is a stock whose dividends are based on market fluctuations. It is dangerous in comparison to preferred shares
Preferred stock

Preferred stock, also called preferred shares or preference shares, is typically a 'higher ranking' stock than voting shares, and its terms are negotiated between the corporation and the investor....
 and some other investment options, in that in the event of bankruptcy
Bankruptcy

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed or initiate a restructuring....
, common stock investors receive their funds after preferred stock
Preferred stock

Preferred stock, also called preferred shares or preference shares, is typically a 'higher ranking' stock than voting shares, and its terms are negotiated between the corporation and the investor....
 holders, bondholders, creditors, etc. On the other hand, common shares on average perform better than preferred shares or bonds over time.

Holders of common stock are able to influence the corporation through votes on establishing corporate objectives and policy, stock splits, and electing the company's board of directors.






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Common stock is a form of corporation equity
Equity

Equity is the name given to the set of law principles, in jurisdictions following the English law common law tradition, which supplement strict rules of law where their application would operate harshly, so as to achieve what is sometimes referred to as "natural justice"....
 ownership represented in the securities
Security (finance)

A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities , and stock securities; e.g., common stocks....
. It is a stock whose dividends are based on market fluctuations. It is dangerous in comparison to preferred shares
Preferred stock

Preferred stock, also called preferred shares or preference shares, is typically a 'higher ranking' stock than voting shares, and its terms are negotiated between the corporation and the investor....
 and some other investment options, in that in the event of bankruptcy
Bankruptcy

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed or initiate a restructuring....
, common stock investors receive their funds after preferred stock
Preferred stock

Preferred stock, also called preferred shares or preference shares, is typically a 'higher ranking' stock than voting shares, and its terms are negotiated between the corporation and the investor....
 holders, bondholders, creditors, etc. On the other hand, common shares on average perform better than preferred shares or bonds over time.

Holders of common stock are able to influence the corporation through votes on establishing corporate objectives and policy, stock splits, and electing the company's board of directors. Some holders of common stock also receive preemptive rights, which enable them to retain their proportional ownership in a company should it issue another stock offering.

Additional benefits from common stock include earning dividends and capital appreciation
Appreciation

Appreciation is a term used in accounting relating to the increase in value of an asset. In this sense it is the reverse of depreciation, which measures the fall in value of assets over their normal life-time....
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