Question

Upon corporate liquidation, what is the order of funds paid out from first to last?

A) Shareholders, unsecured creditors, debenture holders, secured Creditors.
B) Secured creditors, debenture holders, unsecured creditors, shareholders.
C) Shareholders, secured creditors, unsecured creditors, debenture holders.
D) Unsecured creditors, debenture holders, secured creditors, shareholders.

Answer 1

The correct order of funds paid out upon corporate liquidation is secured creditors, debenture holders, unsecured creditors, shareholders.

Step-by-step explanation:

The correct order of funds paid out upon corporate liquidation is:

1. Secured creditors
2. Debenture holders
3. Unsecured creditors
4. Shareholders

Secured creditors have the first claim to the company's assets, followed by debenture holders, unsecured creditors, and lastly, shareholders. This order is determined by the priority of claims in the event of liquidation.