Debt is a less risky than equity because a debtholder's claim has priority to an equity holder's claim.

Name: Debt is a less risky than equity because a debtholder's claim has priority to an equity holder's claim.
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Debtholders have priority over equity holders in receiving payment in case of bankruptcy or liquidation of a company. This makes debt less risky than equity as debtholders are more likely to get their investment back in such a scenario.

Debt Is a Less Risky Than Equity Because a Debtholder's