The Term Residual Claim Refers to a Stockholders' Right to

question 265

Multiple Choice

The term residual claim refers to a stockholders' right to

• A) receive dividends.
• B) share in assets upon liquidation.
• C) acquire additional shares when offered.
• D) exercise a proxy vote.

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Definitions:

Dividends Per Share

The amount of dividend a company pays out to each shareholder for each share they own, typically expressed on an annual basis.

P/E

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

Market Price

The current price at which an asset or service can be bought or sold on the open market.

Net Cash

The amount of cash available after accounting for cash inflows and outflows.