The company issued the following debt: senior unsecured debt, secured bonds (backed by a mortgage on...

The company issued the following debt: senior unsecured debt, secured bonds (backed by a mortgage on a firm’s property) and shareholder loans. In case of default the group of investors that will be served as first from the proceeds from selling the property is:

A. Holders of senior unsecured debt

B. Holders of secured debt

C. Shareholders who provided loan to the company

Expert Solution

The secured debts will always be having a priority at the claim because it is secured by the mortgage on a firm's property and all those unsecured loan are having a priority after the claim of the secured loan has been fulfilled.

Shareholders will always be having a residual claim.

Correct answer would be option( B) Holders of secured debt

jeff jeffy answered 2 years ago

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