The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Search Results for: common stock

COMMON STOCK

A security that gives voting rights, partial ownership, and claim on a firm’s assets. It is not paid back and lost if the company should fail. It allows the owner to elect

COMMON STOCK FUND

A mutual fund that puts all assets in common stocks of well established firms.

CLASSIFIED COMMON STOCK

Stock in many categories that is typically divided into two classes based on benefits. ClassA is available to the public; a non-voting, dividend-paying stock . ClassB is voting stock held by the

VOTING STOCK

Common shares give the owner the right to vote at the AGM. Also known as voting shares.

STOCK OPTION

Option giving holders the right to sell or buy common stock at a set pricey a set date.

STOCK BUYBACK

Increasing treasury stock contra account by repurchasing outstanding common stock and permanently taking it out of circulation, thereby making shares more valuable for existing shareholders, and also preventing a controlling interest. AKA

STOCK SPLIT

An attempt by an investor to increase their number of outstanding shares and reduce the par value of their common stock lowering the purchase price to attract investors. Refer to reverse stock

STOCK SWAP

The pooling of interests accomplished by exchanging equal common stock resulting in a merger or acquisition or the exchange by a shareholder of their stock for a greater amount of stocks. Refer

LINE STOCK

Screws, washers, nuts and bolts do not merit piece by piece costing, being of such low value, yet, are identified as common parts or components of a product.

NEW YORK STOCK EXCHANGE (NYSE) COMPOSITE INDEX

Market capitalization value weighted index. Covers common stock price movements as ordinary shares of some 2300 firms listed on NYSE. , All shares relate to an aggregate market capitalization value set December

DIRTY STOCK

Transferred COMMON STOCK that fails to convey good title to the new buyer as a result of errors or omissions in form or authorization.

EMPLOYEE STOCK OPTION PLAN

Qualifying employees earn permission to buy specific numbers of the firm’s common stock as ordinary shares at a discount. Considered to be an incentive program. Known also as stock option plan or

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

In the United States, a program where a company provides shares of its COMMON STOCK to employees through a TRUST. The program builds employee ownership and aligns employee/investor interests, and creates a

CONVERTIBLE PREFERRED STOCK

A class of PREFERRED STOCK that allows the investor to convert it into a specified number of shares of COMMON STOCK once a conversion price is reached. Convertible preferreds pay DIVIDENDS rather

CLASSIFIED STOCK

Separate classes of COMMON STOCK issued by a company with each class granting investors a distinct set of RENT RIGHTS and/or CONTROL RIGHTS. Classified stock is often used to increase or decrease