Stockholders are residual claimants,meaning that they
A)have the first priority claim on all of a company's assets.
B)are liable for all of a company's debts.
C)will never share in a company's profits.
D)receive the remaining cash flow after all other claims are paid.

Question

Quizplus · Accepted Answer

Stockholders are residual claimants, meaning they have the last priority claim on a company's assets. This means they only receive the remaining cash flow after all other claims such as debt payments, salaries, and taxes are paid. Therefore, choice D is the correct answer.

Stockholders Are Residual Claimants,meaning That They