As a result, when companies liquidate or go through a bankruptcy restructuring, common stockholders generally receive nothing, and their shares become worthless.
Common stock on a balance sheet
Equity is the value of what the stockholders own. On a company's balance sheet, common stock is recorded in the "stockholders' equity" section. This is where investors can determine the book value, or net worth, of their shares, which is equal to the company's assets minus its liabilities.
The main point to remember is that the total stockholders' equity is the book value of the stock, but that doesn't necessarily mean the stock trades for this amount. Rapidly growing companies may trade for several times their book value, while riskier or struggling companies may trade at a discount.