Question

………….. are also known as ‘residual owners’
(a) Preference shareholders (b) Equity shareholders
(c) Commercial paper (d) Debentures holders

Answer 1

Equity shareholders are known as ‘residual owners’.

Option (b) is correct.

Explanation:

• Equity shareholders are known as the residual shareholders or residual owners.
• These shareholders are paid and it depends on how much income they earn through a source.
• When the assets of a company are completely settled and then at that time the equity shareholders can claim what is left behind.

Answer 2

Equity shareholders are also known as ‘residual owners’

• Equity shareholders are paid on the basis of the earnings of the company and do not get a fixed dividend.
• They are referred to as 'residual owners'.
• They receive what is left after all other claims on the company's income and assets have been settled.