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Explain what is meant by The ownership of the firm is residual in nature?
Wiki User
∙ 11y ago
Common shareholders receive what is left over after all other claims on the firm have been satisfied. Because they are residual claims, common stocks have no stated maturity. In other words, unlike corporate bonds, common stocks do not have a date on which the corporation must buy them back. The shareholder receives these residual benefits in the form of dividends, capital gains or both.
Wiki User
∙ 11y ago
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