| Common Stock |
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Is
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 and have rights to a company's assets only after
bond holders, preferred shareholders and other debt holders have been
paid in full.
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In
other words if the company goes bankrupt the common stockholders will
not receive their money until the creditors and preferred shareholders
have received their respective share of the leftover assets. The upside
to common shares are that they usually outperform bonds and preferred
shares. |
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Dictionary
