Bubba owns a subordinated debenture in a company that is liquidating. When will he get paid?
A)after the company pays its outstanding bills, but before paying bank loans
B)after the bills are paid and the bank is paid, but before the preferred shareholders
C)before the holders of secured debt
D)after the shareholders of preferred stock

Question

Quizplus · Accepted Answer

after the bills are paid and the bank is paid, but before the preferred shareholders. As a creditor, Bubba is paid before any of the shareholders. But his position is subordinated to other creditors, like the bank and accounts payable.

Bubba Owns a Subordinated Debenture in a Company That Is