Junior Security

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DEFINITION of 'Junior Security'

A security that ranks lower than other securities in regards to the owner's claims on assets and income in the event of the issuer becoming insolvent.

INVESTOPEDIA EXPLAINS 'Junior Security'

When bankruptcy occurs, holders of both preferred shares and debt securities have first claim on the remaining assets. Only after preferred shareholders have been paid back, remaining assets (if any) are divided among common shareholders.

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  3. What are the types of share capital?

    Share capital refers to the funds a company receives from selling ownership shares to the public. A company that issues 1, ... Read Full Answer >>
  4. What are the main disadvantages of fixed income securities?

    Fixed-income securities attract investors because they provide guaranteed returns in the form of fixed, regular cash payments. ... Read Full Answer >>
  5. What are the different equity financing options available to companies in the United ...

    Finding and attaining affordable financing is an ongoing challenge for most businesses within the United States. Debt financing ... Read Full Answer >>
  6. What are the advantages and disadvantages of preference shares?

    Preference shares carry a number of benefits for both companies and investors. The chief benefit for shareholders is that ... Read Full Answer >>
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