Common Stock

 Common stock, also known as ordinary shares or equity shares, represents ownership in a corporation. When you buy common stock in a company, you become a shareholder, which gives you certain rights, such as the right to vote on matters affecting the company and the right to receive a portion of the company's profits in the form of dividends.

Unlike debt securities such as bonds, common stock does not have a fixed maturity date, and the dividend payments are not guaranteed. Instead, the value of the stock can fluctuate based on a variety of factors, including the company's financial performance, market conditions, and investor sentiment.

One of the primary benefits of owning common stock is the potential for capital appreciation. If the company performs well and its stock price rises, investors can earn a profit by selling their shares at a higher price than they paid for them. Additionally, companies may choose to reinvest their profits into the business to fuel growth, which can lead to increased stock prices over the long term.

However, common stock also carries risks, as the value of the stock can decline if the company performs poorly or if there are adverse market conditions. Additionally, common shareholders are typically last in line to receive any proceeds in the event of a bankruptcy or liquidation.