What does "priority" mean?
A)Higher priority means preferential payout before lower priority claimants.
B)Refers to the amount of payment that will be made upon bankruptcy.
C)Lower priority means preferential payout before higher priority claimants.
D)Debtors will be paid after the equity holders if there is a bankruptcy.

Question

Quizplus · Accepted Answer

Priority refers to the order in which claims are paid during a bankruptcy or insolvency. Higher priority claimants are paid first, and lower priority claimants are paid after. So, option A is correct as it states that higher priority claimants are paid before lower priority claimants.

What Does "Priority" Mean