What is the minimum amount shareholders should expect to receive in the event of a complete corporate liquidation?
A) Market value of equity
B) Book value of equity
C) Zero
D) Shareholders may be required to pay to be liquidated.

Question

Quizplus · Accepted Answer

In the event of a complete corporate liquidation, shareholders might not receive any payments because their claims are paid after the claims of all other creditors such as bondholders, lenders, and suppliers are settled. Therefore, shareholders are typically the residual claimants after all other stakeholders have been paid.

What Is the Minimum Amount Shareholders Should Expect to Receive