Common stocks are the shares of a company that give the holder a claim to the equity of the company. Common stock is traded on public markets and its price is determined by market demand. Companies issue common stock as a way to generate capital (equity) that can be used to grow and improve the company’s operations.
Common stock holders are owners of the company and have a right to elect the board of directors and participate in the revenue stream of the company. The holder of common stock has no guarantee of a return and because common stock holders are the last in line of all the owners of equity in the company; buying common stock in a company involves risk. The investor hopes that the company will provide a return to its common stock holders by issuing dividends or by improving its operations and increasing the value of the stock.
Homepages -
Dogs of the Dow Glossary -
Dogs of the Dow -
Investor Glossary # A B C D E F G H I J K L M N O P Q R S T U V W X Y ZRelated Terms -
Dow Jones Industrial Average (DJIA) -
Standard and Poor's 500 Index - S&P 500 -
New York Stock Exchange (NYSE) -
Wall Street -
Blue Chip Stocks
