Consider the following statements :
Statement I :
As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.
Statement II :
Bondholders are lenders to a company whereas stockholders are its owners.
Statement III :
For repayment purpose, bondholders are prioritized over stockholders by a company.
Which one of the following is correct in respect of the above statements?
1
Both Statement II and Statement III are correct and both of them explain Statement I
2
Both Statement I and Statement II are correct and Statement I explains Statement II
3
Only one of the Statements II and III is correct and that explains Statement I
4
Neither Statement II nor Statement III is correct