Question

Match the given distinctiveness to the type of equity or debt finance that is available for a business.

TILES
common stock
preferred stock
retained earnings
senior debt
subordinate debt

Boxes
the profit is used in the business
the equity holders are paid dividends at regular intervals
the equity holders have a right to vote on corporate policy
the lenders are always paid within a predetermined time
the debt carries more risk and is not the first in line to be paid

Answer 1

See below

Step-by-step explanation:

Common stock

The equity holders have a right to vote on corporate policy. In the case of liquidation, common stockholders are last in line in the distribution of the company's assets.

Preferred stock

The equity holders are paid dividends at regular intervals. Preferred stockholders have a priority in dividends payments over common shares but have no voting rights.

Retained earnings

The profit is used in the business. Retained earnings are profits that a company's management opts to distribute to shareholders as dividends.

Senior debt

The lenders are always paid within a predetermined time. Senior debts are low risk as they are given priority over other debts in repayment.

Subordinate debt

The debt carries more risk and is not the first in line to be paid. In the event of liquidation, subordinate debts are considered last in order of payment.