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What is Common Stock?

Definition of Common Stock

A security that represents the primary unit of ownership in a corporation. A holder of a common stock has a right to participate and vote in corporate decision matters in shareholder meetings and receive dividends. However, dividends are first paid to preferred stock holders before they are paid to common stock holders. In the case of liquidation, common shareholders have a right to companys assets but only after bondholders and preferred shareholders are paid.
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