If a corporation goes bankrupt, who among the following has first claim on the firm's assets?

Question

Quizplus · Accepted Answer

Bondholders have first claim on the firm's assets in case of bankruptcy. This is because bonds are forms of debt financing, meaning that the company has borrowed money from bondholders with the promise of paying it back with interest. As a result, bondholders have a priority claim over stockholders and employees in terms of getting their money back from the firm. The state where the corporation is chartered does not have a claim on the firm's assets in case of bankruptcy.

If a Corporation Goes Bankrupt, Who Among the Following Has