What Is A Common Stock?

A common stock is a security that represents part-ownership in a listed company that most of us have. Common stock entitles its holders to voting rights and to any dividends declared by the company. However, the dividends may fluctuate according to the company’s performance. An example of a common stock would be Hyflux Limited (SGX: 600).

Common stockholders are on the bottom of the priority ladder in terms of ownership structure. In the event of the liquidation of a company, common stock holders have rights to a company’s assets only as the last priority. The bond holders, preferred stockholders and other debt holders will be paid in full in that order before common stockholders are paid.

Common stock is also called “ordinary share.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.