What is meant by hierarchies in long-term financing and why are bonds higher in priority than shares?

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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Question Posted: Feb 22, 2024 03:00 AM

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What is meant by hierarchies in long-term financing and why are bonds higher in priority than shares?

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In the context of longterm financing hierarchies refer to the order of priority or ranking in terms of claims on a companys assets and cash flows in the event of liquidation or bankruptcy These hierar...View the full answer

Corporate Finance

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