Common stock

If you invest in common stock, you’re investing in the ownership of a corporation. It means that you also get to help elect the board of directors and vote when the company makes corporate decisions (as long as you have a voting share and not a non-voting share). In short, each share of common stock that a company owns represents a portion of ownership for that company.

Example: A company must declare a dividend first, which is the amount of money that the shares they’re selling are worth. Suppose they set this dividend to $5 million and sell a million shares. Each shareholder of one common stock would get $5. If you have ten shares, you’d get $50.

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