Common stock is a form of corporate equity ownership, a type of security. It is called 'common' to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock
holders, bondholders, creditors, etc. On the other hand, common shares
on average perform better than preferred shares or bonds over time.
Common stock is usually voting shares,
although sometimes maybe not. Holders of common stock are able to
influence the corporation through votes on establishing corporate
objectives and policy, stock splits, and electing the company's board
of directors. Some holders of common stock also receive preemptive
rights, which enable them to retain their proportional ownership in a
company should it issue another stock offering.
Additional benefits from common stock include earning dividends and capital appreciation.