Common Stock

Security that represents ownership in a corporation. Common stocks must be issued by the corporation itself. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. Common shareholders, however, do not have any rights to a company's assets in the case of liquidation until all bondholders, preferred shareholders, and other debt holders have received their full repayment. In the stockholders' equity section of a company's balance sheet, common stock is disclosed..