Typically, the security issued by a foreign firm that is purchased for the purpose of issuing a global depositary receipt (GDR) is:

When a foreign firm issues securities that are intended to be converted into global depositary receipts (GDRs), they typically issue common stock. GDRs are financial instruments that allow investors to hold shares of a foreign company in their own currency, making investments in foreign firms easier and more accessible.

Common stock is the appropriate security to underlie GDRs because it represents ownership in a company and provides the GDR holder the right to vote and receive dividends, just like direct shareholders. GDRs are essentially a reflection of the underlying shares of common stock, which allows investors exposure to the performance of the foreign company without needing to directly own its shares.

While bonds, preferred stock, and convertible securities can also be used in international markets, they do not lend themselves to GDRs in the same way. For example, bonds are fixed-income securities with different rights and obligations than equity, while preferred stock generally does not provide voting rights or the same level of appreciation potential that common stock does. Convertible securities can convert into common stock, but they are not directly issued for the purpose of creating GDRs.

Thus, the most logical security to be issued for the purpose of GDR creation is common stock, as it provides the most direct and