Equity holders are a corporation's ________. That means the corporation must pay all of its debt holders before it pays its equity holders.
A)debtors
B)brokers
C)residual claimants
D)underwriters

Question

Quizplus · Accepted Answer

Equity holders are also known as residual claimants because they have a residual claim on the company's assets after all debts and other obligations have been paid. This means that they will only receive payment if there is something left over after all other claims have been satisfied. Therefore, the corporation must pay all of its debt holders before it pays its equity holders.

Equity Holders Are a Corporation's ________