Asked by Estefanie Estupinan on Jun 23, 2024
Verified
The priorities of corporate security are usually
A) fixed charges in preference over floating charges, debentures in preference over mortgage bonds.
B) fixed charges in preference over floating charges, mortgage bonds in preference over debentures.
C) floating charges in preference over fixed charges, debentures in preference over mortgage bonds.
D) floating charges in preference over fixed charges, mortgage bonds in preference over debentures.
Corporate Security
Strategies and measures adopted by a corporation to protect its assets, intellectual property, and employees.
Fixed Charges
Fixed charges are ongoing, regular expenses that a company or individual must pay, such as loans, rent, and utility bills, which do not vary with business volume or activity.
Floating Charges
A security interest over a pool of changing assets of a company which "floats" until it is converted into a fixed charge, generally upon the occurrence of a default event.
- Comprehend the delicacies involved in the management of corporate funding and the legalities of securities.
Verified Answer
IW
Inser WandlkowskiJun 30, 2024
Final Answer :
B
Explanation :
The correct priority for corporate security typically places fixed charges over floating charges because fixed charges are secured by specific assets, making them safer for lenders. Mortgage bonds, which are secured by real property, generally have preference over debentures, which are unsecured.
Learning Objectives
- Comprehend the delicacies involved in the management of corporate funding and the legalities of securities.