Common Stock o A residual claim on the earnings (dividends) of the firm o Limited liability o Voting and non-voting shares o Dividends and Capital Gains o Debt holders and preferred stockholders have priority over common stockholders in the event of distress or bankruptcy. Example o If you buy 100 shares of IBM common stock, to what are you entitled? o What is the most money you can make over the next year? o If you pay $190 per share, what is the most money you could lose over the year? Common Stock o A residual claim on the earnings (dividends) of the firm o Limited liability o Voting and non-voting shares o Dividends and Capital Gains o Debt holders and preferred stockholders have priority over common stockholders in the event of distress or bankruptcy. Example o If you buy 100 shares of IBM common stock, to what are you entitled? o What is the most money you can make over the next year? o If you pay $190 per share, what is the most money you could lose over the year