Fill in the blanks. A corporation issues two classes of equity shares, preferred shares and common...

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Fill in the blanks. A corporation issues two classes of equity shares, preferred shares and common...

Fill in the blanks. A corporation issues two classes of equity shares, preferred shares and common shares. The preferred shares have priority on dividends and distribution on liquidation over the common shares. Therefore, these two classes of shares are not ________ ________.

Answer would be within two words and total 10 letters include blank space.

business accounting

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Answer 1

Answer #1

Therefore these two classes of shares are not debt instrument

Debt instruments are different from equity instrument. Preferred and common stock represents the ownership in the company while debt instrument represents the creditorship of the company.

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Answer 2

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