Business, Legal & Accounting Glossary
An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation’s assets and profits. However, the claim to a company’s assets and earnings of most stockholders is subordinated to the claim that the company’s debtors have on its assets and earnings. also called equities or equity securities or corporate stock.
Corporate stock is the capital or monetary fund that a company raises through the sale of shares.
Shares of corporate stock define an ownership entitlement, called an equity position, and represent a proportional claim on a company’s assets and future earnings. Ownership is determined by the number of shares of corporate stock a person owns divided by the total number of shares of corporate stock outstanding. The value of the corporate stock depends on the value, profitability, and future potential of the issuing corporation. Changing market conditions also dictate what purchasers are willing to pay for corporate stock. There are two primary types of corporate stock: common corporate stock and preferred corporate stock. Each type of corporate stock offers a shareholder certain rights and limitations.
A corporate stock certificate is the written instrument that is usually issued to a shareholder. An owner of corporate stock may be entitled to voting rights and participation in the management of the corporation. Only corporations issue corporate stock. Other business forms such as a sole proprietorship or limited liability entity do not issue corporate stock. Corporate stock differs from other securities, such as notes and bonds, as these do not offer or represent ownership interest.
You need to make sure that you have done all of your research before you decide it is time to invest in corporate stock.
I had a generous amount of corporate stock, and wasn’t looking to dump it anytime soon, despite what the analysts were saying.
I invest in the corporate stock of Lululemon, Whole Foods, Nike and Apple because I want to have equity in companies that I believe in, and in the corporate stock of some miscellaneous companies that I am less knowledgeable about because they offer strong dividends for an income investor like myself.
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This glossary post was last updated: 26th October, 2021 | 0 Views.