It is common to refer to common stockholders as the "owners” of a firm, because investors in common stock have certain r

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It Is Common To Refer To Common Stockholders As The Owners Of A Firm Because Investors In Common Stock Have Certain R 1 (141.28 KiB) Viewed 61 times

It is common to refer to common stockholders as the "owners” of a firm, because investors in common stock have certain rights and privileges generally associated with property ownership. Common stockholders bear most of the risk associated with a firm's operations, but they tend to benefit the most when a firm performs well. Each of the statements below describes a term associated with common stock. Identify which statement corresponds with each term listed in the table below: Income Stocks Growth Stocks Preemptive Right Statement Proxy The return on this type of stock primarily comes from capital gains. Mature firms that have stable earnings and little growth opportunity tend to pay large, relatively consistent dividends each year. Consequently, their stock tends to be classified as this type of stock. This requires that a firm offers existing stockholders shares of a new stock issue in proportion to their ownership holdings before such shares can be offered to other investors. Common stockholders have the right to elect a firm's board of directors, who in turn appoint the officers who manage the company. Most common stockholders transfer their right to vote to a second party through this instrument.
Equity, or common stock, trades on stock markets all around the world. Because of globalization, the lines between equity markets are being blurred. In many cases, multinational firms sell equity in foreign equity markets. In other words, they sell stock on exchanges outside of their home country. An investor purchased a certificate that represents ownership of 1,000 shares of stock in Kimchi, a company based in Korea. The certificate entitles the owner to receive any dividends paid by the company in U.S. dollars. The statement above is an example of which of the following? A Yankee stock An American Depository Receipt (ADR) A Euro stock