The view that equity holders only receive payment on their investment in a firm after all legitimate claims by a firm's other stakeholders are satisfied is known as the ________ view of equity holders.
A) stakeholder
B) residual claimants
C) legitimate claimants
D) extraordinary claims

Question

Quizplus · Accepted Answer

The residual claimants view of equity holders states that they only receive payment on their investment after all other legitimate claims by the firm's stakeholders have been satisfied. This means that equity holders only receive leftover, residual funds after all other obligations have been met.

The View That Equity Holders Only Receive Payment on Their