What is Common Stock? common stock

Securities on behalf of equity ownership in a business, make available voting rights, and allowing the holder to a split of the company's achievement through dividends and/or capital appreciation. In the event of liquidation, common stockholders have privileges to a company's assets only after bondholders, other debt holders, and preferred stockholders have been pleased. Typically, common stockholders receive one vote per share to elect the company's board of directors (even though the number of votes is not always directly proportional to the number of shares owned).

The board of directors is the group of individuals that signifies the holders of the business and oversees main conclusions for the company. Common shareholders also receive voting rights about other company matters such as stock splits and company objectives. In addition to voting rights, common shareholders sometimes benefit from what are called "preemptive rights". Preemptive rights permit common shareholders to continue their comparative ownership in the company in the event that the company issues another offering of stock. This means that common shareholders with preemptive rights have the right but not the commitment to purchase as many new shares of the stock as it would take to sustain their comparative ownership in the company also called junior equity.
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