Ch. 8 - Common_and_PreferredShares

CSC Flashcards

What is common stock?

Common stock is a type of security that represents ownership in a corporation and a claim on a part of the company's assets and earnings.

What are the benefits of holding common stock?

Benefits include potential capital appreciation, dividends, and voting rights in corporate decisions.

What is the risk associated with common stock?

The risk includes the potential loss of investment, as common stockholders are last in line for asset claims during liquidation.

How do common stock dividends work?

Dividends are payments made by a corporation to its shareholders, typically distributed from profits.