Common stockholders:

Question

Quizplus · Accepted Answer

Common stockholders have a residual claim on both income and assets, which means that they are entitled to whatever remains after paying off all other claims such as debts and preferred stockholders. However, in the event of bankruptcy, they are last in line to receive payment after all other parties have been satisfied. Therefore, both option A and B are correct. Option C is incorrect because preferred stockholders have a higher claim on assets than common stockholders.

Common Stockholders