Vergara Enterprises is the parent company of Seibert Incorporated and owns 49% of the company. Therefore, Vergara does not report their affiliation with Seibert on their balance sheet. Seibert Incorporated has a 75:25 debt-to-equity ratio, and the fair value of all their assets is currently not enough to cover their debt. If Seibert goes under and is immediately obligated to pay their debts, who do you expect may be responsible for paying the debts that Seibert cannot pay?

• A :

  Vergara Enterprises

• B :

  Investors who report an affiliation with Seibert on their balance sheet

• C :

  No one, as creditors will have to take a loss

• D :

  The government