What is meant by the term "residual claim to income", as applied to common stockholders?© BrainMass Inc. brainmass.com June 4, 2020, 2:19 am ad1c9bdddf
What is meant by the term "residual claim to income", as applied to common stockholders?
As applied to common shareholders, the shareholders "are entitled to the remaining income/profits of the company after all outside claims are met." The earnings/income available to shareholders equal profit after tax minus preference dividend; the preference after tax is equal to operating profits less taxes (Khan, 2007). It can be argued that the stockholders have a residual ...
This solution defines the term "residual claim to income" as it applies to common stockholders in 250 words with one reference.