Stocks

A stock is a share of ownership, or equity, in a corporation. Owners of stock have a claim on a share of the corporation’s earnings and assets. If a company is highly profitable or the demand for its stock goes up, the value of its stock increases; if it doesn’t do well, stock values drop. Common stock also gives owners a right to vote in some corporate decisions. Preferred stock doesn’t grant voting rights but pays periodic dividends in the form of cash or additional stock.