Common equity cost more than preferred stock-long term debt

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1) The relationship between management and the company’s common shareholders is a _________________ relationship; while the relationship between management and the company’s bondholders is a ________________ relationship.

2) In bankruptcy, on average, how much recovery of their investment do common shareholders get?

3) Of the 3 types of long term capital, common equity is the most expensive to the company. In a few words, why does common equity cost more than preferred stock or long term debt?

4) In a few words, what is the most important difference between a common shareholder and a preferred shareholder?

5) Fill in the blanks: 

1) “Face value” of a bond is another name for . 

2 A zero coupon bond is always sold at .    

In a few words, why?

Reference no: EM131514699

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