A debt investor is someone who lends money to a company with the expectation that it will be paid back with interest. This is different from a stockholder, who buys a share of ownership in the company and may receive dividends, but does not have a guaranteed return on their investment. Option B describes a type of investor known as a bondholder, while option C is more closely related to a philanthropic donor.

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A Debt Investor Is

Question 27

Multiple Choice

A debt investor is

A) a person who provides money to a company with the expectation that it will be paid back with interest.
B) a person who provides money to a company and expects periodic cash payments in return, though the original money never has to be repaid.
C) a person who provides money to a company as a gift with a stipulation that it will be used as agreed.
D) often referred to as a stockholder.

Correct Answer: