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Which of the following groups is paid first when a firm liquidates?


Question

Which of the following groups is paid first when a firm liquidates?

Options

A) Preference shareholders

B) Debenture holders

C) Ordinary shareholders

D) Cumulative preference shareholders

The correct answer is A.

Explanation:

preference shareholders is a term used in venture capital contracts to specify which investors get paid first and how much they get paid in the event of a liquidation event such as the sale of the company.

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Dicussion (1)

  • preference shareholders is a term used in venture capital contracts to specify which investors get paid first and how much they get paid in the event of a liquidation event such as the sale of the company.

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