5. Which of the following statements is FALSE? a. In the extreme case, the debt holders take legal ownership of the firm's assets through a process called bankruptcy. b. Equity holders expect to receive dividends and the firm is legally obligated to pay them. c. A firm that fails to make the required interest or principal payments on the debt is in default. d. After a firm defaults, debt holders are given certain rights to the assets of the firm.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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5. Which of the following statements is FALSE?

a. In the extreme case, the debt holders take legal ownership of the firm's assets through a process called bankruptcy.

b. Equity holders expect to receive dividends and the firm is legally obligated to pay them.

c. A firm that fails to make the required interest or principal payments on the debt is in default.

d. After a firm defaults, debt holders are given certain rights to the assets of the firm.

 

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