The FDIC pays off on a failed bank. Assets are worth $100 million. Insured deposits total $60 million. Uninsured deposits and other unsecured liabilities total $80 million. What proportion of the stockholders' claim of $10 million will be realized in the FDIC payoff?

Question

Quizplus · Accepted Answer

The FDIC pays insured depositors first. After paying the $60 million insured deposits, $40 million remains. Uninsured deposits and other liabilities total $80 million, leaving nothing for stockholders.

The FDIC Pays Off on a Failed Bank