In the event of bankruptcy, stockholders:

Question

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Stockholders are considered residual claimants in the event of bankruptcy, meaning they are the last to be paid after all other parties such as creditors and bondholders have been paid. They could end up losing all or even more than their initial investment depending on the circumstances of the bankruptcy. Limited liability protects them from being personally liable for the company's debts, but it does not guarantee a return on their investment.

In the Event of Bankruptcy, Stockholders