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?

  1. Cumulative preference shareholders
  2. Debenture holders
  3. Ordinary shareholders ✓
  4. Preference Shareholders
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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