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Stocks (also known as "shares" or "equity") are a form of security that signifies the part-ownership of a corporate entity as well as a fraction of the entities' assets and earnings.

There are two different types of stocks: common and preferred. Common stock typically entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock owners, usually don't have voting rights, but are instead entitled to a higher claim on assets and earnings than those who own common stock. For example, owners of preferred stock will receive dividends ahead of common shareholders and also have priority if company was to go bankrupt and is liquidated.

A holder of stock (shareholder) is entitled to a part of the company's assets and earnings. The level of ownership is determined by the number of shares a person owns in relation to the number of outstanding shares. For example, if a company has issued 1,000 shares and a shareholder has bought 100 of them, they in essence own 10% of the company's assets.