Common shares
Encyclopedia of Business Terms and Methods, ISBN 978-1-929500-10-9. Copyright © 2012 by Marty J.Schmidt. Revised 29 January 2012.
The Meaning of Common shares (Common stock)
Common shares refers to shares of stock whose owners who have residual claims on the assets and earnings of a corporation after all debt and preferred share stock shareholders’ claims have been met.
Ownership of common shares ordinarily brings stockholder voting rights, whereas ownership of preferred shares usually does not.
The term capitalization is a measure of a company’s financial framework, covering the company’s underlying value as represented by the total securities issued, such as bonds, debentures, long-term liabilities or debt, and preferred and common stock.
A broader measure of this framework is a company’s financial structure, which includes all of the above but also short term liabilities such as accounts payable.
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