Which of the following investors can force a firm into bankruptcy court if the firm does not pay the expected cash flow to the investor?

Question

Quizplus · Accepted Answer

Debt investors have a legal right to the expected cash flow, and they can demand payment and force the firm into bankruptcy court if the payment is not made. Common equity and preferred equity investors do not have this right and would have to rely on other means, such as voting power or negotiation, to address any issues with the firm's cash flow.

Which of the Following Investors Can Force a Firm into Bankruptcy