Which of the Following Is the Most Senior Claim in the Pecking

question 8

Multiple Choice

Which of the following is the most senior claim in the pecking order?

• A)collateralized long-term debt
• B)factored receivables
• C)short-term debt with strong covenants
• D)retained earnings

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Definitions:

Nationalize

The process by which a government takes control of a private industry or assets and transforms it into state ownership.

Profit Maximization

The technique a corporation employs to determine the pricing and level of output that maximizes earnings.

Vicious-Circle-Of-Poverty

A self-perpetuating condition where poverty leads to circumstances that perpetuate poverty, making it difficult to break the cycle.

Capital Stock

For a single firm, the current market value of the firm’s plant, equipment, inventories, and intangible assets.