Respuesta :
The security that represents the residual ownership of a firm and has no priority in bankruptcy is called a convertible bond.
The correct option is A.
What is bankruptcy?
People or other entities who are unable to pay their creditors back can seek some or complete relief from their debts through the legal process known as bankruptcy. In most jurisdictions, bankruptcy is mandated by a court order, frequently on the debtor's initiative.
What is residual ownership?
The common stockholders are paid out last and only if all other claims have been fully satisfied. The common stockholder is therefore referred to as the company's residual owner.
What is convertible bond?
A convertible bond, convertible note, or convertible debt is a kind of bond that allows the holder to convert it into a predetermined number of shares of common stock in the firm issuing it, or cash equivalent to that amount. It is a hybrid security having traits similar to equity and debt.
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I understand that the question you are looking for is:
The security that represents the residual ownership of a firm and has no priority in bankruptcy is called:
A. a convertible bond.
B. senior debt.
C. common stock.
D. preferred stock.
E. retained earnings.
