Asked by Kesha Boston on Jun 02, 2024
Verified
Bondholders are creditors,and therefore they have a claim on the firm's assets that must be satisfied before any claims of stockholders in the event of the firm's bankruptcy,reorganization,or liquidation.
Bondholders
Individuals or entities that hold debt securities issued by corporations or governments, entitling them to interest payments and the principal investment return at maturity.
Creditors
Individuals, businesses, or financial institutions that lend money or extend credit to others, expecting to be repaid with interest in the future.
- Gain insights into the different kinds of financial instruments and securities, including their levels of risk and protective insurance measures.
Verified Answer
MM
Morgan MoseleyJun 07, 2024
Final Answer :
True
Explanation :
In the event of a firm's bankruptcy, reorganization, or liquidation, bondholders, as creditors, have a priority claim on the firm's assets over stockholders. This means they are paid before stockholders if the firm's assets are distributed.
Learning Objectives
- Gain insights into the different kinds of financial instruments and securities, including their levels of risk and protective insurance measures.