What characterizes common stock compared to preferred stock?

Common stock is characterized by representing ownership in a company and typically comes with voting rights. This ownership allows common stockholders to influence corporate decisions, such as electing the board of directors and approving major corporate actions. This participatory aspect is essential for shareholders as it lets them have a say in the management and strategic direction of the company.

In contrast, preferred stock generally does not carry voting rights, which limits the influence of preferred shareholders on corporate governance. Additionally, while common stockholders may or may not receive dividends—depending on the company's profitability and distribution policies—preferred stockholders often enjoy fixed dividends paid out before any dividends are distributed to common stockholders. Common stockholders also take on more risk compared to preferred shareholders because they are last in line when it comes to claims on a company's assets in the event of liquidation.

Thus, the defining feature of common stock is the ownership it conveys linked with voting rights, making option B the correct characterization.