Which statement best describes equity securities compared to debt securities?

Equity securities are shares of ownership in a company and often come with certain privileges not associated with debt securities, such as the ability to receive dividends and the opportunity to vote on company matters. When an investor holds equity, they have a claim on a portion of the company’s earnings, which can be distributed in the form of dividends. Additionally, equity shareholders typically have voting rights, allowing them to influence corporate decisions. This combination of dividends and voting power is a defining feature of equity securities, distinguishing them from debt securities, which generally do not offer voting rights and are characterized by fixed interest payments and return of principal.

This context highlights that while equity can be more volatile and have risks, it offers unique benefits, making option B the most accurate statement regarding the characteristics of equity compared to debt.