Which of the following financing alternatives has the highest preference of payment in a case where the company liquidates its assets?

Question

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Bonds usually have a higher preference of payment in case of liquidation than both common and preferred stock. This is because bonds represent a debt obligation that the company has to repay before any payments can be made to stockholders. Therefore, bondholders have a higher priority in receiving payment if the company liquidates its assets.

Which of the Following Financing Alternatives Has the Highest Preference