What does common stock mean?

Common stock is the most common type of stock. This is when people own shares in a company, which they can sell when they want to and help determine what the company does since they vote at shareholder meetings.

The downside is that it means less money per share than preferred stock in terms of dividends (although some companies give you voting privileges).

Example of common stock:

If a company has 100 shares outstanding, one share would be equal to 1% ownership of the company.

Common stock is generally a security that offers ownership in a corporation.

Shareholders who possess common stock can vote on corporate policies and plans and elect the board of directors.

So, for example, if a company maintains 1,000 shares outstanding, and an investor picks up 100 shares, that would represent 10% of ownership in the business.

This is different from preferred stock that does not extend voting rights to shareholders, plus the preferred shareholders are given priority, from corporate income to higher dividends.