Subordinated debt means debt that is:

Question

Quizplus · Accepted Answer

Subordinated debt is a type of debt that is lower in priority for payment of principal and interest. This means that in the event of default or bankruptcy, it will be paid after other debts, such as senior debt and secured debt, have been paid. This makes subordinated debt riskier for investors, but also allows issuers to raise capital at a lower cost compared to senior debt. Therefore, the correct answer is C - lower in priority for payment of principal and interest.

Subordinated Debt Means Debt That Is