Common Stocks

Common stocks represent a degree of ownership in the corporation. They may vote on questions affecting the corporation in proportion to the number of shares held. Common shareholders have rights to elect the directors of the corporation. However, some common stocks have limited voting rights, or no voting rights at all.

No matter which type of common shares is owned, the investor may still profit from an increase in stock prices or through dividends. Most stock traders are based on the expectation that the purchased stock will rise in price, and the investor’s profit will be the difference between price paid and price sold.

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