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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Residual Claim To Assets

Definition:

The claim to leftover assets.

If you have common shares, you have a residual claim to assets. This means that if the company goes bankrupt and sells its assets, the creditors and others are paid first. If there's anything left over, you have rights to that leftover (residual) stuff.

Spoiler alert: By the time everyone's paid off, there's usually nothing left.

A few percent of $0 is still $0. That's just how math works.