Which of the Following Best Describes the Position of the Bondholders

Multiple Choice

Which of the following best describes the position of the bondholders of an incorporated firm?

A) They are owners of the corporation.
B) They are creditors of the firm and thus expect to be paid interest on their investment according to their bond indenture (contract) .
C) They have the same rights and privileges of preferred shareholders of the firm.
D) They are equity owners of the firm but they receive interest payments, not dividends.