We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is Common Stock Equity?

Geri Terzo
By Geri Terzo
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Investors who purchase common stock equity obtain equity ownership in a corporation. Additionally, investors gain the permission to vote on major corporate events, and the influence that each voter has is based on the number of shares owned. Common stock investors may be rewarded with dividends based on corporate profits and the direction that a business's management team prefers to take. The price of common shares is determined based on supply and demand in the financial markets.

Common stock is a type of equity that is most actively traded in the financial markets. These shares are often bought and sold with the help of a stockbroker. Common stock equity shares trade on a major stock exchange where the buying and selling of financial securities is regulated. Investors gain exposure to these shares either by trading stocks individually or investing in mutual funds, which are portfolios that contain a number of different shares and that are run by professional managers for a fee.

Every year, publicly traded companies hold annual shareholder meetings in which investors are welcome to attend. It is during these gatherings that holders of common stock equity are offered a chance to vote on major company happenings. A common vote could be on a potential change to a company's board of directors when a member is up for reelection. Also, in the event that a company has announced a major transaction, such as a merger or acquisition, shareholders of common stock have the right to cast a vote in favor of or against the deal. Usually, shareholders can vote once for each share of common stock that is owned, and in the event that investors cannot attend a meeting, votes can still be cast via proxy.

Buying common stock equity offers investors an opportunity to share in corporate profits. It also, however, exposes investors to the risk of potential losses. The price of common stock equity is based on investor demand and the supply of shares, and the market value can advance or decline dramatically in a single trading session. Many different factors influence supply and demand, including internal corporate conditions and external factors that occur in an industry or the economy.

When corporate profits exceed expectations, a company's management and board of directors may decide to distribute dividends to investors. This is an additional and potential reward that can occur during a quarter or for the year. Dividends may be paid in cash or with additional shares of stock.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.