Common stockholders have a residual claim to income, in other words they are last in line.

A) True

B) False

Question

Arthur Payne

Business

8 January, 19:46

Common stockholders have a residual claim to income, in other words they are last in line.

A) True

B) False

+2

Answers (1)

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Donte Barajas · Answer 1

Answer: True

Explanation: In simple words, common stock holders refers to the individuals who have the ownership rights of the company in form of common stocks or generally termed as equity shares.

These stockholders gets dividend in return of their investment. They usually receive the highest dividend among all of them but their rate is not fixed as preference shareholders and debt holders.

These shareholders are considered as the owners of the company due to their voting rights and thus have last preference in event of liquidation and receives the residual left after paying for the creditors such as debt holders and preference holders.

Common stockholders have a residual claim to income, in other words they are last in line.A) TrueB) False

Common stockholders have a residual claim to income, in other words they are last in line.

A) True

B) False