Under certain circumstances, when the firm is in default debtholders and preferred stockholders may receive a voice in management; otherwise, only common stockholders have voting rights.

Question

Quizplus · Accepted Answer

This is true. When a firm is in default, debtholders and preferred stockholders may have the right to vote and influence management decisions. In other situations, only common stockholders have voting rights.

Under Certain Circumstances, When the Firm Is in Default Debtholders