One significant difference between debt and equity securities is that the owners of debt securities are entitled to first call on the assets of the issuer in precedence to owners of equity securities in the event of insolvency of a company.

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This statement is true. Debt securities, such as bonds, represent loans made by investors to the issuer and are backed by the issuer's assets. In the event of insolvency, the owners of debt securities have the right to be paid first from the proceeds of the liquidation of the issuer's assets, before any distributions are made to the owners of equity securities, such as common stock.

One Significant Difference Between Debt and Equity Securities Is That