The Holder of Which One of These Securities Has First

question 61

Multiple Choice

The holder of which one of these securities has first claim on the assets of a firm?

• A)senior debt
• B)common stock
• C)subordinated debt
• D)preferred stock

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Definitions:

Coupon Rates

Interest rates specified on bonds or other fixed-income securities that issuers promise to pay bondholders annually, expressed as a percentage of face value.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the company's equity at certain times during their life, usually at the discretion of the bondholder.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, accounting for interest payments and the capital gain or loss.

Current Yield

Current yield refers to the annual income (interest or dividends) received from an investment, expressed as a percentage of the investment's current market price.