Common shareholders have a claim on the company's assets
A) at any time, equal to the value of their shares.
B) only after the claims of debtholders and preferred shareholders have been satisfied.
C) after the claims of the preferred shareholders have been satisfied, but before the debt holders.
D) never. Common shareholders have no claim on the company's assets.

Question

Quizplus · Accepted Answer

Common shareholders are at the bottom of the priority ladder when it comes to a company's assets. In the event of liquidation, the company must first satisfy the claims of debtholders (creditors) and preferred shareholders before any assets can be distributed to common shareholders.

Common Shareholders Have a Claim on the Company's Assets