As residual claimants, these investors claim any cash flows to the firm that remain after the firm pays all other claims.

Name: As residual claimants, these investors claim any cash flows to the firm that remain after the firm pays all other claims.
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Question

Quizplus · Accepted Answer

Common stockholders are residual claimants, meaning they are the last in line to receive cash flows from the firm after all other claims (such as payments to creditors, bondholders, and preferred stockholders) have been paid.

As Residual Claimants, These Investors Claim Any Cash Flows to the Firm