Holders of equity have claims on both income and assets that are secondary to the claims of creditors.

Name: Holders of equity have claims on both income and assets that are secondary to the claims of creditors.
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Question

Quizplus · Accepted Answer

This is true as equity represents ownership in a company and entitles the holder to a portion of the company's income and assets, but their claims are subordinate to those of creditors such as lenders and bondholders.

Holders of Equity Have Claims on Both Income and Assets