What are common stocks?

also known as voting shares or ordinary shares, common shares are shares of shares that hold the privilege of participating in any voting activity that affects the direction of the corporation. This includes the right to submit votes for those looking for a place on the company's board. Shares of this type usually provide a holder of a dividend, which is paid according to the conditions related to the issue of individual shares.

For investors, the purpose of the ownership of common shares is to do with the level of return, which can be adequately expected from these shares. To this end, investors will often try to get enough shares of the shares to create a reasonable increase in the value of the investment portfolio over time. If the return is not in line with the expectations of the investor, there is a great chance that shares will be sold and the investor will receive Shares issued by another company that represents the potential for a more attractive return.

There are situations where investors decide to acquire common shares issued by a given company because they see long -term business potential and want to be part of the process of building a business to achieve this potential. In this case, voting rights and liability can be considered at least as important as generating a permanent amount of dividend income. Investors who think they want to participate in the company policy, as well as playing a role in determining the one who will serve in the Business Board of the Business Council.

Investors holding ordinary shares may not necessarily be physically present when a vote on the question of policy or filling in the chair on the board is taking place. In many jurisdictions, corporations can structure a voting process that allows shareholders to submit a voting document that expresses their wishes regarding the current problem faced by the company. The company often creates a document and then dInsiating shareholders who are responsible for returning the completed voting document for a specific date and time.

While there are benefits associated with common shares, including regular dividend earnings, there is also a degree of risk. If the issuing corporations were dissolved for any reason, investors who have common stocks usually wait for their share of the remaining capital after bond holders, other types of secured creditors, and those who have preferred shares are compensated according to the dissolution provisions. This means that the investor may or may not receive enough settlement to compensate for the original investment and effectively create a loss for the investor.