Common stock
In one sentenceEqual shares in the ownership of a joint stock company, giving their holder voting rights and a portion of distributed profits and of what remains of the assets on liquidation after all creditors.
Simply put
A common shareholder is a partner: they gain when the share price rises and from dividends, and lose if the company declines. No dividends are guaranteed to them.
Their portion is determined by the number of shares they own divided by the total shares issued.
Worked example
A joint stock company has 1,000,000 shares issued, you own 50,000 of them, and it decided to distribute total dividends of 2,000,000 SAR.
Your ownership percentage50,000 ÷ 1,000,000 = 5%
Dividend per share2,000,000 ÷ 1,000,000 = 2 SAR
Your share of the distribution = 50,000 × 2100,000 SAR
Don't confuse it with
Preferred stockIt ranks first in distributions and liquidation under specific terms, and may not carry voting rights.