Holders of common stock receive certain benefits,such as a residual claim,which:
A)is the right of stockholders to be paid back their investment before anyone else if the company ceases operation.
B)is the right to oversee management of the company.
C)is the right to share in any remaining assets after creditors have been paid off,should the company cease operations.
D)is the continuing right to receive a share of the company's profits in the form of dividends.

Question

Quizplus · Accepted Answer

A residual claim is the right of common stockholders to share any remaining assets after creditors have been paid off, should the company cease operations. This means that common stockholders have a claim to the company's assets, but only after all debts and obligations have been satisfied. Common stockholders do not have a right to oversee management, they do not have priority in receiving their investment back, and they are not guaranteed to receive dividends.

Holders of Common Stock Receive Certain Benefits,such as a Residual