Common stockholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders

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Common stockholders are known as the residual owners because they bear the ultimate risks and uncertainties of the business and receive the benefits of enterprise ownership only after all other claims on the company's income and assets have been addressed, including debt holders and preferred stockholders. They do not have rights to specific assets nor are they entitled to a guaranteed dividend every year. They also cannot negotiate individual contracts on behalf of the enterprise.

Common Stockholders of a Business Enterprise Are Said to Be