common stock

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TERM OF THE DAY common stock Type of security that serves as an evidence of proportionate ownership, imparts proportionate voting rights, and gives its holder unlimited proportionate claim on the assets and income of the firm (after the claims of lenders, and otherobligations, are satisfied). Common stock constitutes the equity capital (also called risk capital) of the firm which is never paid back (redeemed), and is lost if the firm fails. Common stock usually has a par value (amount for which eachshare is sold for when first issued) but has no guaranteed value afterwards. In bad years, common stock holders may receive little or no income (dividends) at all. But, in good years, there is no limit to the amount they may receive except the limits imposed by the ... Learn more about this term Usage Example The year-over-year growth in earnings was aided by a decline in share count stemming from repurchase and cancellation of common stocks during the quarter. Source: Magna Remains Neutral - Yahoo! News Malaysia