Common Stock
The primary class of company ownership shares, granting holders voting rights and a residual claim on assets and earnings after all other obligations are paid.
What is Common Stock?
Common stock represents fractional ownership in a corporation and is the most widely traded type of security on public exchanges. Common stockholders have the right to vote on major corporate matters — including the election of the board of directors and approval of mergers — typically one vote per share. In the event of bankruptcy or liquidation, common shareholders are last in line after debt holders and preferred stockholders, making common equity the riskiest layer of the capital structure. Common stockholders benefit from dividends when declared by the board, as well as potential capital appreciation. The term 'common stock' is interchangeable with 'ordinary shares' in British English.
Example
When Alphabet (Google's parent company) conducted a 20-for-1 stock split in July 2022, each holder of one common share received 19 additional shares, reducing the per-share price from approximately $2,800 to $140. The split did not change the total value of each investor's position — simply making shares more accessible — and illustrated how common stock ownership translates into proportional economic interest in the underlying business.
Source: Investopedia — Common Stock