SIE practice questioneasyLiquidation Priority
In a corporate liquidation, which of the following has the HIGHEST priority claim on assets?
- APreferred stockholders
- BCommon stockholders
- CSecured bondholders✓ Correct answer
- DGeneral (unsecured) creditors
Explanation
Why C — Secured bondholders
The liquidation priority is: secured creditors first, then unsecured creditors, then subordinated debt, then preferred stockholders, and finally common stockholders. Secured bondholders have claims backed by specific collateral, giving them the highest priority among these choices.
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