Compared with a bondholder, an ordinary shareholder generally has:
Correct answer: B. A residual claim on the company's assets
- A. A guaranteed periodic payment
- B. A residual claim on the company's assets
- C. Priority repayment before all creditors
- D. A fixed maturity date for investment
Explanation
An ordinary shareholder receives a residual claim after creditors and preferred claims are satisfied. Dividends are not guaranteed, and ordinary shares normally have no fixed maturity date.
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About Finance and Banking Basics
Business finance covers capital requirements, sources of funds, budgeting, cash flow, investment decisions and basic financial statements and ratios. Banking includes commercial bank functions, deposits, loans, credit creation, interest and the role of a central bank, including its monetary policy and regulatory functions.
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