A corporation's shareholders are its:
A)board of directors.
B)residual claimants.
C)specialized active managers.
D)supervisors.

Question

Quizplus · Accepted Answer

Shareholders are the owners of a corporation and have a residual claim on the company's profits and assets after all other claims have been satisfied. They entrust the management of the company to directors and specialized active managers, but ultimately it is the shareholders who bear the risk associated with the company's success or failure. Therefore, they are best described as residual claimants. Choices A, C, and D do not accurately depict the role of shareholders in a corporation.

A Corporation's Shareholders Are Its