4. 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 firms 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:

Statement	Income Stocks	Growth Stocks	Proxy	Preemptive Right
A type of stock that pays little or no dividends because the firm is retaining its earnings for future investment in the company.
A type of stock that tends to pay large, consistent dividends each year.
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 firms 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.

Sony, a Japanese multinational firm, issued stock that trades on the FTSE exchange in London.

The statement above is an example of which of the following?

An American Depository Receipt (ADR)

A Yankee stock

A Euro stock