Definition:
Common stock is the general stock issued to most stockholders of a corporation. Common stock is usually voting stock; that is, ownership of common stock provides for the right to vote at the annual meeting. Common stock entitles the owner to share in dividends, stock splits, and share price increases.
On the other hand, if the corporation declares bankruptcy and is liquidated, common stockholders usually are not able to recover any of their initial shares in the corporation. Common stockholders as a class fall behind bondholders, creditors, and owners of preferred stock.
