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Stock Definition

An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. Ownership in the company is determined by the number of shares a person owns divided by the total number of shares outstanding. For example, if a company has 1000 shares of stock outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock. also called equity or equity securities or corporate stock. 

Related Terms

common stock, preferred stock, authorized shares, borrowed stock, certificate, consumer stock, control stock, corporation, cumulative preferred, cyclical stock, deal stock, donated stock, dividend, distribution stock, float, full stock, going public, guaranteed stock, high-tech stock, income stock, initial public offering, marginable stock, market value, security, share, shareholder, ticker symbol, ESOP, employee stock repurchase agreement, Joint Stock Company, nonstock corporation, nonvoting stock, original issue stock, outstanding stock, penny stock, story stock, synthetic stock, treasury stock, unissued stock, vetoing stock, voting stock, widow-and-orphan stock, defensive stock, loan stock, restricted stock

Related Research Articles from the InvestorGuide.com University

Types of Stock
With so many options, how do I decide which stocks are right for me? Topics include common and preferred stock, stock classes, market cap, penny stocks, sector stocks, cyclical stocks, defensive stocks, and tracking stocks.

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