Common Stock

Common stock represents fundamental ownership in corporations, providing shareholders with voting rights on major corporate decisions and board elections. Common shareholders receive dividends after preferred shareholders and have residual claims on assets in liquidation. Unlike bonds or preferred stock, common stock dividends aren't guaranteed and depend on company profitability and board decisions. Common stockholders benefit from capital appreciation as company value increases and may receive special dividends or stock splits. They bear the highest risk but also have the highest potential returns among security types. Common stock provides liquidity through public trading and serves as the primary means for public companies to raise equity capital.