Friday, February 20, 2015

Why is it that shareholders receive dividend last?

Why is it that shareholders receive dividend last?
Shareholders assume the least amount of risk in comparison to other members of a company. They are separate legal entities, which means that they are only responsible for their investment in stock(s) of the company. If the company was in a financial struggle debt collectors cannot come after shareholders for cash because they are separate legal entities. Since they assume the least amount of risk, they receive dividends last.

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