On liquidation of a public limited liability company; the residual owners are the?

A. creditors
B. debenture shareholders
C. preference shareholders
D. ordinary shareholder

Correct Answer:

Option D – ordinary shareholder

Explanation

Ordinary share capital refers to shares that are issued by a company that allows shareholders voting rights within a corporation. Ordinary shareholders may also receive dividends. The value of the assets of a company net of its liabilities and any amounts of capital due to holders of shares other than ordinary shares (e.g. preference shares). If the company were to go into liquidation this would be the equity available for distribution to the ordinary shareholders.