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JAMB Commerce 2012 Question 26

Question 26

Business Units

In case of liquidation of a public limited liability company, those that are first paid are

  1. A.ordinary shareholders
  2. B.preference shareholders
  3. C.cummulative preference shareholders
  4. D.debenture holders.
Show the answer and explanation

Answer: D (debenture holders.)

Explanation

Debenture holders are creditors of the company, so they are paid before any shareholders.