9. which of the tollowing statements 15 CORRECT? (Points : 1.5) O In order, stak

Question

9. which of the tollowing statements 15 CORRECT? (Points : 1.5) O In order, stakeholders would be paid in the tollowing sequence: Preferzed Stock, Secured Debt, Unsecured Debt and Common Stock O In order, stakeholders would be paid in the following sequence: Common Stoek, Preterred Stock, Secured Debt and Unsecured Debt. O In order, stakeholders would be paid in the tollowsng sequence: Secured Debt, Unsecured Debt, Preterred Stoek and Comnon Stoek. O In order, stakeholders would be paid in the tollowing sequence: Preferred Stock, Common Stock, Secured Debt and Unsecured Debt

Explanation / Answer

Shareholders are the risk bearers. Therefore they are Paid last. Preference shareholders are paid before paying to Common Stock because they have Preference in repayment of capital and dividend over common shareholders. Therefore Secured Debt must be Paid First and then Unsecured debt and then Preferred Stock and last common Stock.

Answer Option 3. Secured Debt, Unsecured Debt, Preferred stock and common stock

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