Review Question MyLab Finance Solution 7-1 What are the key differences between debt and equity? Review Questions MyLab Finance Solutions 7-2 What risks do common stockholders take that other suppliers of capital do not? 7-3 How does a rights offering protect a firm's stockholders against the dilution of ownership? 7-4 Explain the relationships among authorized shares, outstanding shares, treasury stock, and issued shares. 7-5 What are the advantages to both U.S.-based and foreign corporations of issuing stock outside their home markets? What are American depositary receipts (ADRs)? What are American depositary shares (ADSs)? 7-6 What claims do preferred stockholders have with respect to distribution of earnings (dividends) and assets? 7-7 Explain the cumulative feature of preferred stock. What is the purpose of a call feature in a preferred stock issue