Common Stock

(1) Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise greater control and may gain the greater reward in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.
(2) An accounting measure, carried at par value on the books of the company. Common stock plus capital surplus represent the stockholders’ initial investment in the company.

Updated on: 24/04/2023