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State about the equity owners
Flip side of the coin is that the equity owners are also owners of all the profits which remain after all the debt holders are paid their interest. Interest payment is fixed when there is no limit on the levels of profits that can accrue to equity holders. Vice Versa doesn't apply here, liability of the equity holders is limited to the level of investments which they have put in into the company and not unlimited.
Explain the flow of goods and paper work in Diagram on Page 74 Ed. 10 [P. 70 in Ed. 9] of your textbook. Explain a. how the transaction would work without a Letter of Credi
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