common stock

finance

Also known as: ordinary shares

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Last updated

June 24, 2026

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In finance, common stock, also known as ordinary shares, represents a residual ownership stake in a corporation or limited-liability company. Holders of common stock are entitled to unlimited interest in the company's earnings and assets after all other claims are paid.1

Common stockholders typically have voting rights, allowing them to control the company's direction, and may also have preemptive rights to maintain their equity percentage when new stock is issued. Dividends paid on common stock can fluctuate with earnings and are often reinvested by management to expand the firm, leading to potential growth in stockholders' equity. The market price of common stock is sensitive to investor expectations about future earnings.1

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Common stock, in some countries called ordinary shares, represents a residual interest in the earnings and assets of a corporation. Whereas distributions to bonds or preferred stock are ordinarily fixed, dividends paid on common stock are set at the time of payment by the directors…
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Common stock, in some countries called ordinary shares, represents a residual interest in the earnings and assets of a corporation. Whereas distributions to bonds or preferred stock are ordinarily fixed, dividends paid on common stock are set at the time of payment by the directors…
Read More