Protection of Bondholders' Claim

Related BrainMass Solutions

• This posting addresses preferred stockholders claim on asset

  has priority over the claims of common stockholders, but not bondholders has priority over the claims of bondholders, but not common stockholders Preferred stockholders hold a claim on assets that: has priority over the claims of both

• This post addresses remaking the financial world.

  If you were in a position to remake the financial world: Why would or wouldn't you have the bondholders' claim be protected to the possible detriment of the shareholders' claim?

• Define ratio analysis and its limitations

  to satisfy notes such as short-term and bondholders providing money for long-term debt Retained earning - money recorded a common stock that shareholders claim.

• Finance MCQ: Common, preferred stock, equity capital, cumula

  junior claim on assets and income relative to bondholders. 3. common stockholders have a voice in management; bondholders do not. 4. dividends paid to bondholders are tax-deductible but interest paid to stockholders is not. 2.________ are promised

• Common stockholders

  There is no legal enforceable claim on dividends. The distribution of dividends is at the discretion of the company and the shareholders cannot force the distribution of dividends.

• Managerial Decision Making

  Though, already, the company knew that it owed a lot of debt and it is really difficult to get out of the tough situation, still it appealed for bankruptcy protection. So, escalation of commitment resulted in the bankruptcy protection.

• Stocks and bonds

  In the event of liquidation, bondholders have a prior claim as compared to stockholders who have the residual claim. The decision to go for stock or bond financing is a capital structure decision for the firm.

• annuity and dividends for common stocks.

  The common stockholders will have the claim after the interest is paid to bondholders and taxes is paid, and the dividends is paid to preferred stockholders.

• Steinberg Corporation and Dietrich Corporation

  If there is a recession, its stockholders will receive nothing since the firm's bondholders have a more senior claim on all $800,000 of the firm's earnings.