The term residual claim refers to a stockholders' right to
A) receive dividends.
B) share in assets upon liquidation.
C) acquire additional shares when offered.
D) exercise a proxy vote.

Question

Quizplus · Accepted Answer

Residual claim refers to the right of stockholders to share in the assets upon liquidation. This means that after all debts and other obligations have been paid off, the remaining assets of the company will be distributed among the stockholders based on their ownership percentage. This right is different from the right to receive dividends or acquire additional shares, which can be determined by the company's management or board of directors. Additionally, exercising a proxy vote refers to the right to vote on company matters, which is also different from the residual claim right.

The Term Residual Claim Refers to a Stockholders' Right to