CFA Level I · CFA Level I Exam · Organizational Forms, Corporate Issuer Features, and Ownership
A company's bondholders and its suppliers are both stakeholders in the firm. Compared with common shareholders, creditors are most likely to:
Creditors most likely hold a contractual claim to fixed payments of interest and principal. Their claim ranks ahead of equity in liquidation. Shareholders, by contrast, hold the residual claim on assets and typically the voting rights over directors.
- Ahave a residual claim on the firm's assets
- Bhold a contractual claim to fixed payments of interest and principalCorrect
- Creceive voting rights on the election of directors
Explanation
Creditors hold contractual claims, typically fixed interest and principal, with priority over equity in liquidation. Shareholders hold the residual claim and usually carry voting rights, so the other options describe equity holders.
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