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Greetings sir, could you please help me with this question?
In the context of company finance, which of the following is usually repaid FIRST on liquidation of a company?
A. Floating charge creditors
B. Fixed charge creditorsHow do we judge??
Exactly, so the answer given behind Kaplan kit which says Floating charge creditors is wrong?
Also the company is liquidating in this case
Unless you’ve not typed out the full question (and I suspect that you haven’t!) it seems to me that the Kaplan answer is incorrect
There has to be SOME funds set aside for the creditors ranking lower down the order of distribution but I’m not aware of any situation where the floaters are paid in presence to the fixed
OK?
The full question is; In context of company finance which of the following is usually paid FIRST on liquidation of a company?
A. Floating charge creditors
B. Ordinary shareholders
C. Fixed charge creditors
D. Preference shareholdersAnd the answer given is A.
Also, I’m genuinely so grateful for your lecture of this topic and all other topics.. you’re my new favorite, you’ve explained it so well Sir, thanks a ton!!!!
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