What is common stock?
Common stock is a simple form is an equity investment that represents ownership in a corporation. Each share of common stock represents a fractional ownership interest in the firm. For example, if you buy 1 share of common stock in a corporation that has 10,000 shares outstanding, you would be a 1/10,000th owner in the firm. Today, roughly half of all U.S. households own some common stock, either as direct investors or indirectly through a broker or financial institution.
The return on investment in common stock comes from two sources: dividends and capital gains.
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