ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Common shares represent a claim on profits (dividends) and confer voting rights. Investors most often get one vote per share owned to elect board members who oversee the major decisions made by management.

Detailed explanation-2: -Equity, also referred to as stockholders’ or shareholders’ equity, is the corporation’s owners’ residual claim on assets after debts have been paid.

Detailed explanation-3: -Common stock is an asset for the company that issued it, but it is not a liability. Common stock represents ownership in a company and represents a claim on the company’s assets and earnings.

Detailed explanation-4: -A stock represents a share in the ownership of a company, including a claim on the company’s earnings and assets. As such, stockholders are partial owners of the company.

Detailed explanation-5: -“Common shares” is the legal term that typically refers to the corporation’s class of shares that holds the minimum rights described above (right to vote, right to receive dividends, right to residual value of the corporation’s assets upon the corporation’s liquidation).