Stockholders' equity equals
A)both preferred stock and common equity
B)total claims
C)additional paid-in capital plus capital surplus
D)total liabilities and total surplus

Question

Quizplus · Accepted Answer

Stockholders' equity includes both preferred stock and common equity, which represent the residual value of a company's assets after all liabilities have been paid off. It does not include total claims or total liabilities and total surplus, and while additional paid-in capital and capital surplus may be components of stockholders' equity, they are not the only components. Therefore, the correct answer is A.

Stockholders' Equity Equals