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In case of bankruptcy, who will typically receive the firm\'s liquidated assets

ID: 2709366 • Letter: I

Question

In case of bankruptcy, who will typically receive the firm's liquidated assets in which order?

Senior Bondholders, Junior Bondholders, Stockholders

Junior Bondholders, Stockholders, Senior Bondholders

Stockholders, Senior Bondholders, Junior Bondholders

Stockholders, Junior Bondholders, Senior Bondholders

a.

Senior Bondholders, Junior Bondholders, Stockholders

b.

Junior Bondholders, Stockholders, Senior Bondholders

c.

Stockholders, Senior Bondholders, Junior Bondholders

d.

Stockholders, Junior Bondholders, Senior Bondholders

Explanation / Answer

Answer:

A) Senior Bondholders, Junior Bondholders, Stockholders

In liqidation the stockholder's have the final claim on the asset of the company. The bond holders have thier claim before stockholder in the order of thier seniority.

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