Attempts Keep the Highest/1 10. Ch. 7 Common stock 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. O Investors that rely on dividend income as a significant portion of their annual income tend to prefer this type of stock because it pays large, consistent dividends. O This protects common stockholders from the management team of a firm issuing a large number of additional shares and purchasing these shares themselves in an attempt to gain greater control over the company. o o 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. O 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. Portman Industries is a Brazilian multinational company whose stock trades on the New York Stock Exchange. The statement above is an example of which of the following? O A Yankee stock An American Depository Receipt (ADR) O A Euro stock