Request for payment of benefits under the terms of an insurance policy. Typically estimated based on the present value of the after-tax cash flows expected to be earned after the forecast period. Preferred stock typically does not carry the right to vote. Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior To the local state government after a mandated interval has passed from Net pay not collected by an employee, which is typically transferred The profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that centerĪlso called economic value added. The value attributed to a company to represent all future cash flows The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business. Usually refers to the value of a lessor's property at the time the lease expires. Lost wealth of the shareholders due to divergent behavior of the managers.Ī method of allocating the purchase price for the acquisition of another firm among the Investment opportunities for those funds are currently unavailable. Measure the impact of firm-specific events during a particular period.Ģ) Remainder cash flows generated by pool collateral and those needed to fund bonds supported by the collateral.Īssets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.Īn approach that suggests that a firm pay dividends if and only if acceptable The government and litigants in lawsuits.ġ) Parts of stock returns not explained by the explanatory variable (the market-index return). Including time value of money considerations.Ī party to an explicit or implicit contract.Ī claim that can be made only if one or more specified outcomes occur.Īn auditor's statement dis claiming any opinion regarding the company's financialĬlaims that can be bought and sold in financial markets, such as those of stockholders andĬlaims that cannot be easily bought and sold in the financial markets, such as those of Subtracting total liabilities from total assets.Ī reduction in the likelihood one or more of the firm's claimants will be fully repaid, The residual claims that stockholders have against a firm's assets, calculated by Main Page: accounting, credit, inventory control, business, money, investment, financial advisor, inventory,Īlso called a residual claim, a claim to a share of earnings after debt obligation have been Therefore, in this case, the shareholders will be considered as the residual claimants.ĭon’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp.SEARCH Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. After making payment to all other parties, the shareholders might be receiving payment in the end, i.e., they might be receiving the residual amount. in order to compensate them for the services provided. The firm owes definite amounts to factors like labourers, suppliers, etc. The residual claimant need not be the same person all the time.įor example, a firm might be having several factors engaged directly or indirectly in production, such as labourers, suppliers, bondholders, shareholders, etc. Definition: According to the residual claimant theory, after all factors of production/service have received their remuneration, the person/agent supposed to receive the left/residual amount is known as the residual claimant.ĭescription: The residual claimant receives the remainder of the sum after all costs have been accounted for.
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