Shareholder's equity

It is the remaining chunk of assets given to shareholders when all liabilities have been paid. Shareholders may rank themselves on the order to which the remaining assets would be distributed depending on the class of stock they posses that may have some degree of rights than others. After all debts from creditors are settled, stockholders are the next in line to take a claim on a business' assets. If liabilities are greater than assets at the time of liquidation, creditors might eat up all assets and leave nothing for shareholders.















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