Which of the following securities has the highest priority with regard to the distribution of both earnings and proceeds from the liquidation of assets of a firm?

Question

Quizplus · Accepted Answer

Corporate bonds have the highest priority with regard to the distribution of both earnings and proceeds from the liquidation of assets of a firm. Bondholders are typically paid dividends before preferred and common stockholders, and in the event of bankruptcy or liquidation, bondholders are given priority over equity holders in the distribution of assets. Preferred stockholders have priority over common stockholders, but they are still subordinate to bondholders. ADRs and foreign stocks are not relevant to the distribution of earnings or proceeds in a firm.

Which of the Following Securities Has the Highest Priority with Regard