Put the Following in Order of Their Claim on Assets

question 127

Multiple Choice

Put the following in order of their claim on assets of a firm,starting with the LAST to have a claim:
A.Subordinated debentures
B.Debentures (unsubordinated)
C.Common Stock
D.Preferred stock

• A) C, B, A, D
• B) C, D, A, B
• C) B, A, C, D
• D) D, C, B, A
• E) D, C, A, B

---

Definitions:

Corporate Default

A failure of a company to fulfill its financial obligations, such as missing a debt payment.

Lost Sales

Revenue that a company could have earned but didn't, due to stockouts, inadequate capacity, or other factors.

Debt/Equity Ratio

An indicator of how the financing of company assets is divided between shareholder equity and debt.

All-Equity Firm

A company that finances its operations without any debt, relying solely on shareholder equity for funding.