Glossary: Stock

Stock

Stock - Stock is issued by a corporation to signify the equity (share of ownership) in a corporation owned by the stockholder (shareholder). In effect, it represents the shareholder's claim to a share in the corporation's assets and profits in proportion to the shareholder's percentage of the shares of issued stock of the corporation. For example, if you own 3,000 shares of a corporation that has 10,000 shares of its stock issued and outstanding, then you own 30% of the corporation. Voting Stock (such as most Common Stock) accords its owner the right to vote in Board of Directors' elections and in certain other corporate decisions, in proportion to the shareholder's percentage of the shares of voting stock of the corporation. An owner of Preferred Stock, while generally having no voting rights, has a preference over common stock with respect to dividends and payment upon the dissolution of the corporation.

Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.

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