What is the pecking order of payments (from first to last)for a firm's creditors and owners?
A)bondholders,then preferred stockholders,then common stockholders
B)preferred stockholders,then common stockholders,then bondholders
C)common stockholders,then bondholders,then preferred stockholders
D)bondholders,then common stockholders,then preferred stockholders

Question

Quizplus · Accepted Answer

In a firm's capital structure, bondholders are typically paid first because they are creditors of the company. Preferred stockholders come next because they have a preferential claim over common stockholders in terms of dividends and assets during liquidation. Common stockholders are paid last as they are the residual claimants; they have rights to the remaining assets after all debts and preferred dividends have been paid.

What Is the Pecking Order of Payments (From First to Last)for