Final answer:
The residual claimants view of equity holders refers to the perspective that equity holders have the right to claim the remaining assets or profits of a company after all other obligations have been met.
Step-by-step explanation:
The residual claimants view of equity holders refers to the perspective that equity holders are the individuals or entities that have the right to claim the remaining assets or profits of a company after all other obligations have been met. In other words, equity holders have a residual claim on the company's value, meaning they are entitled to any remaining funds or assets after debt holders, employees, and other stakeholders have been paid.
For example, if a company goes bankrupt and its assets are sold off to pay off its debts, the equity holders would have the last claim to the remaining funds or assets. This means that they are at a higher risk compared to other stakeholders, as they are only entitled to the remaining value of the company after all other obligations have been fulfilled.
It's important to note that the residual claimants view of equity holders applies to various forms of ownership in a company, such as common stockholders in a publicly traded corporation or partners in a partnership.