Gepps Cross Industries issues debt with a maturity of 25 years. In the case of bankruptcy, holders of this debt may only claim those assets of the firm that are not already pledged as collateral on other debt. Which of the following best describes this type of corporate debt?

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This type of corporate debt is known as a debenture, which is an unsecured bond not backed by a specific asset or collateral. In the event of bankruptcy, holders of debentures have a lower priority claim on assets than secured debt holders, meaning they may only claim assets that are not already pledged as collateral on other debt.

Gepps Cross Industries Issues Debt with a Maturity of 25