Common Stock

Common stock is the standard form of equity ownership in a company, giving holders voting rights on major corporate matters and a claim on residual profits (through dividends, if declared) and residual assets in a liquidation, after all creditors and preferred shareholders are paid first.

Being last in line is the trade-off for the most upside: common shareholders benefit fully from a company's growth, while preferred shareholders and bondholders get fixed, capped payouts in exchange for a higher claim priority. Most shares that trade on an exchange, and nearly everything discussed casually as "stock," is common stock.