ordinary stock
B2formal / business
Definition
Meaning
The most common type of equity share issued by a corporation, representing ownership and typically carrying voting rights.
Shares that give their holders dividends after preference shareholders have been paid and residual assets upon liquidation, also used more broadly to refer to standard or common shares in contrast to special classes.
Linguistics
Semantic Notes
In finance, specifically contrasts with 'preferred/preference stock' which has priority for dividends. In broader contexts, can imply 'standard' or 'common' shares.
Dialectal Variation
British vs American Usage
Differences
UK English commonly uses 'ordinary shares'; US English prefers 'common stock'. Both terms are understood in both regions, but the regional preference is strong in professional contexts.
Connotations
UK: formal corporate finance term. US: standard investment terminology, slightly more everyday in financial news.
Frequency
High frequency in financial journalism, corporate reports, and investment discussions in both varieties.
Vocabulary
Collocations
Grammar
Valency Patterns
N of ordinary stockV (issue/hold/trade) ordinary stockordinary stock (is/are) V-edVocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “get in on the ground floor (by buying ordinary stock)”
Usage
Context Usage
Business
The company is planning to issue new ordinary stock to raise capital for expansion.
Academic
The study analysed the volatility of ordinary stock returns compared to government bonds.
Everyday
Most of my pension is invested in the ordinary stock of large, stable companies.
Technical
Ordinary stock confers residual claimancy, meaning holders are last in line during liquidation.
Examples
By Part of Speech
adjective
British English
- The ordinary stock holders met for the AGM.
- It was an ordinary stock transaction.
American English
- The ordinary stock offering was oversubscribed.
- He reviewed the ordinary stock proposal.
Examples
By CEFR Level
- This company has ordinary stock.
- Investors can buy ordinary stock on the stock exchange.
- Unlike preferred stock, ordinary stock dividends can vary each year.
Learning
Memory Aids
Mnemonic
ORDINARY STOCK = Own Regular Dividend, Isn't Always Reliable, Yield? Ordinary Stock. Think: common people, common shares.
Conceptual Metaphor
OWNERSHIP IS A SHARE IN A PIE (ordinary stock gets a slice after the preferred slices are taken).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid translating 'ordinary' as простой in a pejorative sense; it means 'common' or 'standard'.
- Do not confuse with 'облигации' (bonds); 'ordinary stock' is 'обыкновенные акции'.
- The word 'stock' here does not mean 'inventory' (запас).
Common Mistakes
- Using 'ordinary stock' to refer to any stock (instead of specifically common equity).
- Confusing it with 'preferred stock'.
- Omitting 'ordinary' when the contrast with 'preferred' is important.
Practice
Quiz
What is a key difference between ordinary stock and preferred stock?
FAQ
Frequently Asked Questions
Yes, in essence. 'Ordinary stock' is the common UK term, and 'common stock' is the common US term for the same basic type of equity share.
No. Holders of preferred/ preference stock have priority for dividend payments. Ordinary stockholders are paid from remaining profits.
Sometimes. Certain financial instruments, like convertible bonds or preferred shares, may have terms allowing conversion into ordinary stock.
It carries higher risk and potential reward than bonds or preferred stock, as its value and dividends depend directly on the company's performance.