What Are Stocks?
Stocks are equity investments that represent ownership in a company. Stocks can also go by the name of “shares” or “equities” which essentially mean you are a (part) business owner. Purchasing company stock comes with certain rights which may include receiving a dividend as well as voting rights at shareholder meetings.
A portion of ownership in a corporation. The holder of a stock is entitled to the company’s earnings and is responsible for its risk for the portion of the company that each stock represents. There are two main classes of stock: common stock and preferred stock.
Common stock
Common stock is a form of corporate equity ownership, a type of security.
here is no unified classification of common stock. However, some companies may issue two classes of common stock. In most cases, a company will issue one class of voting shares and another class of non-voting (or with less voting power) shares. The main rationale for using dual classification is to preserve control over the company.
preferred stock.
- his interest rate remains constant on most–but not all, preferred issues. A small number of issues have a rate that “floats,” based upon a baseline such as Libor.
- Preferred shares normally carry no voting rights (unlike common shares).
- Preferred shares generally have NO maturity date (most are perpetual).
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