Assume that a firm had such serious financial problems that it was about to be liquidated after a bankruptcy.All of the firm's assets are about to be sold in order to pay the following claims against the firm: bondholders,preferred stockholders,common stockholders,and federal income taxes.Of the claims mentioned,what priority would common stockholders have?

Question

Quizplus · Accepted Answer

Common stockholders have the lowest priority in a firm's liquidation process. After bondholders, preferred stockholders, and federal income taxes are paid, whatever remains from the sale of assets will go to common stockholders, if anything is left.

Assume That a Firm Had Such Serious Financial Problems That