Q.State with reasons whether the following statement is True or False:
Bondholders are not owners of the company.
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →The statement is True. A bondholder is a creditor of the company, not an owner.
A bond, like a debenture, is an instrument that acknowledges a loan taken by the company. When a person buys a bond, he lends money to the company, which promises to repay it after a fixed period with interest. This makes the bondholder a creditor of the company.
Ownership of a company rests with its shareholders, especially the equity shareholders, who contribute the owned capital, share in the profits through dividend, bear the risk and enjoy voting rights. Bondholders have none of these ownership features: they receive only a fixed rate of interest whether or not the company earns profit, they must be repaid their loan, and they have no normal voting righ …
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.