1.5 Benefits of owning common stock

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Last updated 3:36 AM on 10/10/26
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6 Terms

1
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Financial benefits of ownership of common stock

  • Capital Gains (Growth)

  • Income

  • Limited Liability


2
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Why include common stock in a clients portfolio

  • potential capital appreciation

  • income from dividends

  • hedge (protection) against inflation


3
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Capital Gains

increase in mkt price of a security

  • historically owning cs has provided investors w returns better than inflation


4
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Risks of owning common stock

  • Value Risk

  • Decreased or No Dividend Income

  • Low Priority at Dissolution


5
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Value Risk

there is a chance that the stock will decline in price

6
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Decrease or No Dividend Income

its possible that due to company performance dividends will decrease or cease