Question

Select the order, in case of bankruptcy, of who gets paid off from first to last....

Select the order, in case of bankruptcy, of who gets paid off from first to last.

A) Secured Creditors, Unsecured Bondholders, Taxes and Wages, Common Stock Holders, Preferred Stock Holders

B) Secured Creditors, Taxes and Wages, Unsecured Bondholders, Common Stock Holders, Preferred Stock Holders

C) Secured Creditors, Taxes and Wages, Unsecured Bondholders, Preferred Stock Holders, Common Stock Holders

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Answer #1

Answer: Option C is correct.
In case of bankruptcy, secured creditors are paid first and common share holders are paid last because the common share holders have the least claim on the assets of a company in case of liquidation or bankruptcy.

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