common stock

Common stock represents ownership in a company, giving shareholders a claim on part of the company's assets and earnings. When you buy common stock, you're buying a piece of the company, which can increase in value if the company performs well. Shareholders often have voting rights on company decisions and may receive dividends, which are portions of the company's profits. However, in the event of bankruptcy, common stockholders are last to be paid. It is a popular way for individuals to invest in companies with potential for growth but also carries higher risk compared to other investment options.