"Common" stock is an equity security that represents the residual value of the corporation.

Question

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Common stock represents ownership in the company, and holders of common stock have the right to vote on matters such as electing the company's board of directors, approving mergers and acquisitions, and issuing additional shares of stock. The residual value refers to the leftover assets and earnings belonging to common shareholders after all other obligations, such as debt repayment and preferred stock dividends, have been fulfilled.

"Common" Stock Is an Equity Security That Represents the Residual