Stockholders' equity is:

Question

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Stockholders' equity represents the owners' claims on the business.These claims arise for two reasons.First,the owners have a claim on amounts they contributed directly to the company in exchange for its stock (Common Stock).Second,the owners have a claim on amounts the company has earned through profitable business operations (Retained Earnings).A company's profits are accumulated in Retained Earnings until a decision is made to distribute them to stockholders in what is called a dividend.

Stockholders' Equity Is