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Common stock is one of several types of equity investments representing ownership of a business. In the event of bankruptcy, equity securities are given lower priority than debt holders.
Synonyms: stock, equity, voting share, ordinary share
For context, it's wise to back up and discuss a basic accounting concept. The common stock owner is the same as an equity owner, who is entitled to all profits after the obligations to creditors are paid. So bondholders, vendors and employees all have higher priority than equity holders. In the event of a bankruptcy, the common stock shareholder's value is essentially erased and through bankruptcy proceedings the net assets of the company are split among creditors.
Voting rights are typically 1 vote for 1 share, but in some cases companies have multiple classes of shares with different voting entitlements.
Doc: Especially in the media sector, some
classes of common stock have more voting power.
Lia: So much for a classless society.
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