If a debenture is subordinated, it:
A)has a higher priority status than speciﬁed creditors.
B)is secondary to equity.
C)must give preference to the speciﬁed creditor in the event of default.
D)has been issued because the company is in default.
E)None of the above

Question

Quizplus · Accepted Answer

Subordinated debentures are lower in priority compared to other debts in the event of a company's liquidation, meaning they must give preference to specified creditors before they can be repaid.

If a Debenture Is Subordinated, It