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Common share
Also called ordinary share, common stock. A CFA term, defined in plain English with the distinction examiners test.
What it means
An ownership claim on a company’s residual cash flows and assets, normally carrying a vote and ranking last in liquidation.
Where it appears in the syllabus
- EquitiesCFA Level I · exam weight 11–14% · Market organisation, indexes, industry analysis, dividend models.
Related terms
- BetaThe sensitivity of an asset’s return to the market’s return — its share of systematic risk.
- Book valueThe accounting value of equity: assets less liabilities as reported.
- Capital asset pricing modelA model stating that an asset’s expected return equals the risk-free rate plus beta times the equity risk premium.
- Cost of equityThe return equity holders require for bearing the residual risk of the business.
- Dividend discount modelValuing a share as the present value of its expected future dividends.
- Earnings per shareNet income available to common shareholders, divided by the weighted average shares outstanding.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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