If a company fails, claims are settled in a fixed order. First in line are the:
AThe advertisers
BThe shopfitters
CThe bondholders
DThe customers
Answer & Solution
Correct answer: C. The bondholders
1. Lenders rank ahead of owners.
2. Preferred holders come next.
3. The bondholders come first.
_Source: OpenStax Principles of Finance 2e, Chapter 17, How Firms Raise Capital._
Keep practising Cost of Capital
Browse all Cost of Capital questions for CFA Level I, or explore more Finance topics.