Active ownership in a company but may have less claim to earnings on profits than does preferred

Stock.

Common stock is issued by all corporations. It represents more effective ownership and control

Because it is, with some exceptions, the voting stock. Holders of common stock have the right to

Choose company directors. Each share of common stock affords its holder one vote. On occasion,

Companies will issue classified stock. One class will permit voting rights and will probably be retained

By the company directors and management. The stock classified as nonvoting will be sold to

the general public. The New York Stock Exchange does not list a company’s nonvoting common

Stock, but some exchanges do.

Holders of common stock are entitled to receive company earnings reports, and they may attend

Annual meetings and vote on company policies. Stockholders who do not go to meetings

Often vote by proxy. This means that they delegate in writing their authority to vote their shares of

Common stock.

The disadvantage of common stock is its minimal claim on company earnings. Dividends on

Preferred stock must be paid first. In case of company failure, holders of bonds and preferred stock

Have first claim on assets.

Preferred stock also represents ownership in a corporation. Holders of preferred stock are entitled