Common Stocks
Common stock is a type of share that grants the holder the right to a portion of a company’s profits and voting rights on key policies and decisions. Common shareholders enjoy certain advantages over preferred shareholders, including: - Higher potential returns: Common shareholders have the opportunity to earn more from dividends and capital appreciation if the company performs well. - Claim on remaining assets: In case of a company liquidation, common shareholders are entitled to a share of the remaining assets after creditors and preferred shareholders are paid. However, common shareholders are last in line during liquidation, which involves higher risk compared to preferred shareholders.
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