They are not liable for the companies losses
They greater voice in the electing board of the directors
They control the management
They have a prior claim on the companies assets
none of the above
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This answer is wrong! Option D is the correct answer.
A key difference between a bond and a stock is what happens when a company files for bankruptcy. Stock holders are last in line in this situation. With this in mind, an advantage of owning a bond over a stock is that generally bond holders are the first people in line to get whatever money is left and/or which can be generated by the sale of the company’s assets. Only after all the bond holders and other creditors are paid, will stock holders get any of their money back.
More times than not, in the case of bankruptcy, there is not enough money to make the bond holders and other creditors whole, so stock holders end up with nothing.
Bonds are typically considered safer investments than stocks because bondholders have a higher claim on the issuing company's assets in the event of bankruptcy. In other words, if the company must sell or liquidate its assets, any proceeds will go to bondholders before common stockholders.
Option D should be the right answer
Greetings, The Myschool Team.
The correct answer to this question is D (They have a prior claim on the companies assets). This is because a bond is a financial instrument that gives its holders a claim to the company's assets, as they generally are "debt-holders" of the company. Thus, in the event of bankruptcy, the bondholders are paid first before shareholders. Therefore, the correct answer is D(They have a prior claim on the companies assets) and not E(none of the above). Thank you.
E is the correct answer,because bond instrument is offered by the government,not companies
