You hold a subordinated debenture in a firm. In the event of bankruptcy you will be paid off before which one of the following?

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In the event of bankruptcy, preferred stockholders have a lower claim on the company's assets than debenture holders, including subordinated debenture holders. Therefore, subordinated debenture holders will be paid off before preferred stockholders. Mortgage bonds and senior debentures have higher priority than subordinated debentures and will be paid off before them. Equipment obligation bonds are a type of secured debt and have a higher priority than subordinated debentures and will be paid off before them.

You Hold a Subordinated Debenture in a Firm