1. Shareholders are special because they provide capital. But, debtholders, incl
ID: 1191793 • Letter: 1
Question
1. Shareholders are special because they provide capital. But, debtholders, including banks and bondholders, clearly also provide capital. Moreover, employees provide human capital, while suppliers and vendors provide raw inputs, often with generous credit terms. Even customers, of course, are providing capital through their purchases.
2. Shareholders are special because they are the owners. But, what do they own, really? The only “ownership” rights that shareholders have is the right to sell their shares, and the right to vote on the board of directors and certain other corporate actions (such as mergers).
Explanation / Answer
shareholders have right of ownership in the company, they just don' t have right to sell their shares and right to vote but they have other rights as well. thay have ownership rights in the portion of the company. they can inspect corporate books and record and can sue for wrongful acts. if company is wound up, after paying creaditors, all the remains are to be shared by the shareholders
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