In the event of winding up of a company, who among the following is paid last?
Source: JAMB · 2024
In the event of winding up of a company, who among the following is paid last?
Explanation
When a company closes down, it pays debts in a specific order. Ordinary shareholders get paid last after everyone else.
Debenture holders are creditors and get paid first. Preference shareholders get paid before ordinary shareholders.
Ordinary shareholders take the highest risk but can earn higher returns when the company does well.
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