Definition for : Asymmetry - shareholder / creditor

There is an asymmetry in status between the shareholder and the creditor of a company: Shareholders can lose the their whole Investment in the company and at the same time potentially gain unlimited profits, while a creditor at best receives the flows stipulated in the loan contract. See also Shareholders' equity and Option model.

(See Chapters Chapter 27 Measuring value creation, Chapter 34 Debt, equity and options theory, Chapter 35 Working out details: The design of the capital structure and Chapter 39 Implementing a debt policy of the Vernimmen)

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