Editing Common stock (section)

{{short description|Form of corporate equity ownership}}
{{For|the plant|Matthiola incana}}
{{Financial markets}}
'''Common stock''' is a form of corporate [[equity (finance)|equity]] ownership, a type of [[security (finance)|security]]. The terms '''voting share''' and '''ordinary share''' are also used frequently outside of the [[United States]]. They are known as '''equity shares''' or ordinary shares in the UK and other [[Commonwealth of Nations|Commonwealth]] realms.  This type of share gives the [[stockholder]] the right to share in the profits of the company, and to vote on matters of [[corporation|corporate]] [[policy]] and the composition of the members of the [[board of directors]].

The owners of common stock do not directly own any assets of the company; instead each stockholder owns a fractional interest in the company, which in turn owns the assets.<ref name="investopedia"/> As owners of a company, common stockholders are eligible to receive [[dividend]]s from its recent or past earnings, proceeds from a sale of the company, and distributions of residual (left-over) money if it is liquidated. In general, common stockholders have lowest priority to receive payouts from the company. They may not receive dividends until the company has met obligations on any [[preference share]]s it has issued, and they receive distributions in liquidation only after bondholders, creditors (including employees) and preference share owners have been paid. When liquidation happens through [[bankruptcy]], the ordinary shareholders typically receive nothing.

Since common stock is more exposed to the risks of the business than bonds or preferred stock, it offers a greater potential for [[capital appreciation]]. Over the long term, common stocks tend to outperform more secure investments, despite their short-term volatility.<ref name="investopedia">{{Cite web|title=Common Stock |url=http://www.investopedia.com/terms/c/commonstock.asp|publisher=ValueClick|work=Investopedia.com|access-date=2013-05-12}}</ref>