What term describes investors who own the firm's common stock?

The term that accurately describes investors who own the firm’s common stock is "Common Stockholders." Common stockholders are individuals or entities that have purchased common shares of a company, representing ownership in that firm. These shareholders have voting rights, allowing them to participate in major corporate decisions, such as electing the board of directors.

Investing in common stock means that these shareholders benefit from the company's profitability, as they have a claim on the residual earnings, typically realized through dividends and capital appreciation. Unlike preferred shareholders, common stockholders have a subordinate claim on assets in the event of liquidation but enjoy greater potential for returns as the company grows.

In contrast, terms like "Equity Holders" could be broader, as it encompasses both common and preferred stockholders. "Preferred Shareholders" refers specifically to those who have a different class of stock with specified benefits, such as fixed dividends but typically no voting rights. "Debt Holders" are individuals or institutions that have lent money to the company, represented by bonds or loans, and do not hold any ownership stake. Understanding these distinctions clarifies the specific role and rights of common stockholders within the framework of corporate finance.