Which of the following statements is incorrect with respect to creditors and equity investors?
A)Both creditors and equity investors are concerned about security prices.
B)Creditors are concerned with assessing the short?term liquidity of a company.
C)Creditors are concerned with assessing the long?term solvency of a company.
D)Equity investors are concerned about dividend payments.

Question

Quizplus · Accepted Answer

Creditors are concerned with the security of repayment of their loans and the interest associated with them, whereas equity investors are concerned with the growth and profitability of the company which may or may not lead to an increase in the stock price. Therefore, creditors and equity investors have different concerns and priorities in terms of the financial health of a company.

Which of the Following Statements Is Incorrect with Respect to Creditors