Common Stock
Chapters in this video
- 0:00 The common stock buffet: residual claim and limited liability
- 2:01 Shareholder rights and cumulative versus statutory voting
- 3:50 Total return calculation and stock split mechanics
- 5:44 Foreign stock, ADRs, and the currency risk trap
- 7:11 Sponsored versus unsponsored ADRs: participation and protection
- 8:09 Rapid-fire exam recap
What this video covers
- Why common stockholders are residual owners with last claim on assets in liquidation, and what unlimited upside plus limited liability means for exam answer choices
- The key rights of common stockholders: voting, preemptive rights (antidilution), inspection, transfer, and the conditional right to dividends
- How statutory voting favors majority shareholders while cumulative voting benefits minority shareholders, and how to calculate votes in each method
- What total return measures and why exam questions asking about "overall performance" require adding capital gains to dividends, not just dividend yield
- Why forward splits and reverse splits change share count and price proportionally but never change total position value, tax status, or total cost basis
- What an American Depository Receipt (ADR) is: a U.S. bank certificate representing foreign shares, and why currency risk still applies despite dollar-denominated trading
- The critical distinction between sponsored and unsponsored ADRs: active foreign issuer participation, exchange listing, SEC reporting, and voting rights
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 65 course also includes adaptive practice questions and spaced-repetition flashcards, free through December 31, 2026.