Ordinary shareholders are essentially creditors of the firm.

Name: Ordinary shareholders are essentially creditors of the firm.
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Ordinary shareholders are not creditors but owners of the firm who hold equity in the form of shares. They share in the profits of the company but also bear the risks of losses. Unlike creditors, shareholders do not have a guaranteed return and their returns are dependent on the performance of the company.

Ordinary Shareholders Are Essentially Creditors of the Firm