Editing Common stock

{{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>

== Shareholder rights ==
Owners of a company's common stock are entitled to rights that are enumerated in its articles, bylaws and applicable corporate law. These can include the right to vote on directors, officers, compensation plans and major business actions such as acquisition or dissolution. Many companies also allow them to submit and vote on proposals to amend the bylaws or to mandate actions by the board. [[Pre-emption right]]s and [[shareholder rights plan]]s regulate the terms under which new shareholders can affect the interests of existing ones. Shareholders have the right to request access to the company's financial records, the list of shareholders, and other records that they legitimately require to fulfill their ownership duties.<ref>{{cite book|last=Milman|first=David|year=2018|title=The Company Share}}</ref>

== Classification ==
Common/Equity stock is classified to differentiate it from preferred stock. Each is considered a [[stock class]], with different series of each issued from time to time such as Series B Preferred Stock. Nevertheless, using "Class B Common Stock" is a common label for a super-voting series of common stock.

== Ownership rights ==
Common stocks exist on both public and private markets, however the accessibility differs because only [[public companies|publicly]] traded companies may have common stock publicly listed. Some companies may for various reasons delist some or all of their shares from the public market and common stock may then be converted to [[limited company|limited]] common stock, other stock or be liquidated altogether.<ref>{{cite web |title=An Empirical Analysis of Common Stock Delistings |url=https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/abs/an-empirical-analysis-of-common-stock-delistings/10F9709E318D359B713983E4A6CDF41F |publisher=Cambridge University Press |access-date=12 April 2023}}</ref>

Common stocks [[listing (finance)|listings]] may be used as a way for companies to increase their [[paid-in-capital|equity capital]] in exchange for dividend rights for shareowners. Listed common stock typically comes in the form of several stock classes in order for companies to remain in partial control of their stock voting rights. [[Non-voting stock]] may be [[shares outstanding|issued]] as a separate class.<ref>{{cite journal |title=The Supply of Money and Common Stock Prices |url=https://www.jstor.org/stable/2326082 |publisher=JStor |jstor=2326082 |access-date=12 April 2023 |last1=Homa |first1=Kenneth E. |last2=Jaffee |first2=Dwight M. |journal=The Journal of Finance |date=1971 |volume=26 |issue=5 |pages=1045–1066 |doi=10.1111/j.1540-6261.1971.tb01747.x |url-access=subscription }}</ref>

== See also ==
* [[Capital surplus]]
* [[Common stock dividend]]
* [[Equity (finance)]]
* [[Share capital]]
* [[Shares authorized]]
* [[Shares issued]]
* [[Treasury stock]]

== References ==
{{Reflist}}{{Stock market|state=collapsed}}
{{Authority control}}

[[Category:Stock market terminology]]
[[Category:Equity securities]]
[[Category:Corporate finance]]