Under U.S.Bankruptcy code,claims against the firm are prioritized along the lines of secured creditors followed in order by:
A)preferred stock holders,common stock holders,and then unsecured creditors after all others have been compensated.
B)unsecured creditors,preferred stock holders,and then common stock holders after all others have been compensated.
C)preferred stock holders,unsecured creditors,and then common stock holders after all others have been compensated.
D)common stock holders,preferred stock holders,and then unsecured creditors after all others have been compensated.

Question

Quizplus · Accepted Answer

Under the U.S. Bankruptcy code, the claims against the firm are prioritized as follows: secured creditors are first, followed by unsecured creditors. Preferred stock holders are ranked after unsecured creditors, and common stockholders are ranked last after all others have been compensated. Therefore, option B is the correct choice.

Under USBankruptcy Code,claims Against the Firm Are Prioritized Along the Lines