In the event of failure for a company that has issued a bond,the highest claims on the company's assets generally comes from:
A) floating-charge debenture holders.
B) fixed-charge debenture holders.
C) unsecured note holders.
D) the shareholders.

Question

Quizplus · Accepted Answer

Fixed-charge debenture holders have a first claim on the company's assets in the event of a failure. They are secured bonds, which means they are backed by specific assets or revenue streams. Floating-charge debenture holders have a second claim on the assets, followed by unsecured note holders and then shareholders.

In the Event of Failure for a Company That Has