CAF-7 · Chapter 8 · Question 8 of 15
In the event of a company going into liquidation, which of the following providers of finance has the lowest priority (i.e., gets paid last) when the company's assets are distributed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Ordinary shareholders
Explanation
Ordinary shareholders hold the ultimate risk in a company. In the event of liquidation, they are the absolute last to be paid, ranking behind secured debt, unsecured debt, and preference shareholders.
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