Also called share, equity, common stock
Stock
A unit of ownership in a company. It carries a vote, a claim on whatever is left after everyone else is paid, and no promise of anything.
Updated 2026-09-05
A share of stock is a slice of ownership in a business. Own one and you own a proportional claim on everything the company has and everything it will earn, alongside every other holder.
Three things come with it. A vote on certain company matters, which for a retail holder is close to symbolic. A claim on distributions if the company chooses to pay any. And a residual claim: if the company is wound up, shareholders get what is left after every creditor, every bondholder and every preferred holder is paid, which is usually nothing. See liquidation order.
That last position is the whole risk-and-return proposition of equity. You are last in line, which is why the returns are higher and why the outcome can be zero. Everything Angie computes is an attempt to estimate what that residual claim is actually worth, which is intrinsic value.
See also
- Preferred stock — A share with a fixed dividend and priority over common stock, usually without a vote. It behaves more like a bond than like equity.
- Shares outstanding — The share count that converts a whole-company equity value into a per-share figure. Getting it wrong scales every valuation by exactly the same error.
- Market cap — What the market currently values the equity at.
- Dividend — Cash paid out to shareholders. It is a decision about what to do with free cash flow, not a measure of how much of it there is.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
