Common stock is a type of equity security that represents ownership in a corporation. When you buy common stock, you are essentially buying a small piece of the company and becoming a shareholder. Common stockholders have several rights and privileges, including:

1. Voting Rights: Common stockholders typically have the right to vote on important company matters, such as electing the board of directors and approving mergers or acquisitions. Each share usually equals one vote.
2. Dividends: Common stockholders may receive dividends, which are distributions of a company’s profits. However, unlike preferred stockholders, who have a fixed dividend rate, common stock dividends are not guaranteed and can vary based on the company’s profitability and decisions by the board of directors.
3. Capital Gains: If the value of the company increases, the price of its common stock may rise, allowing shareholders to sell their shares at a higher price than they paid, resulting in capital gains.
4. Residual Claim on Assets: In the event of a company’s liquidation, common stockholders have a residual claim on the company’s assets, meaning they are entitled to any remaining assets after all debts, liabilities, and preferred stockholders have been paid. However, common stockholders are the last to be paid in such situations, which means they may receive little or nothing if the company’s assets are insufficient.
5. Limited Liability: Common stockholders’ liability is limited to the amount they invested in the stock. They are not personally responsible for the company’s debts and liabilities.

Common stock is often considered more volatile and risky compared to preferred stock and bonds, but it also offers the potential for higher returns due to capital appreciation and dividends. It is the most common type of stock that companies issue and that investors trade on stock exchanges.