Unlike creditors, equityholders are owners of the firm.

Name: Unlike creditors, equityholders are owners of the firm.
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Question

Quizplus · Accepted Answer

Equityholders are investors who own a portion of the company's assets and have a claim on the company's profits. In contrast, creditors are lenders who have loaned money to the company and have a claim on the company's assets in case of default. Therefore, equityholders are owners of the firm, while creditors are not.

Unlike Creditors, Equityholders Are Owners of the Firm