Income Stocks Growth Stocks Preemptive Right Proxy Statement Young firms with lots of opportunities tend to retain most or all of their earnings for reinvestment in the company. These types of firms are considered to have this type of stock. 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. This protects common stockholders against the dilution of value that would occur if new shares were sold at a relatively low value. It is common for management of large firms to solicit shareholders to transfer their voting rights to them using this instrument