Question

When a company is in financial difficulty and cannot fully pay all of its creditors, the first lenders to be paid are the ________. A) stockholders

Answer 1

Answer:

Senior debtholder

Explanation:

In a case when the company is not able to pay the pull amount to its creditors so the first lender is senior debt holder as it became the priority to the company i.e. first the amount is paid to them and the amount i.e. remaining would be paid to others as the senior debtholders are secured as if we compared with the other type of debtholders in terms of collateralized of assets