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Finance: What is a Residual Claim To Assets? 2 Views
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Description:
A residual claim to assets is a preferred stock investor's right to the financial remains of a company that's... gone the way of the dodo.
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Transcript
- 00:00
Finance a la shmoop what is a residual claim to assets? alright people here's an
- 00:09
investment and here's an investment gone bad well here's the result and you have [Cash burning]
- 00:15
a claim to the crumbs of dollar bills here the investment in hair for days.com
- 00:21
didn't go so well instead of regrowing hair as it promised
- 00:26
it actually made hair disappear in you know other places so the investors eight
Full Transcript
- 00:32
million bucks is mostly gone Microsoft is buying the company for a
- 00:36
scrap price of five million since you were the preferred stock investor and
- 00:41
there was no debt junior or senior or otherwise no IRS bills owed no vendor
- 00:47
bills owed just the preferred IEU well you have this residual claim to the you know
- 00:54
financial residue and the eight million bucks you invested went to Jenny Craig [Man with briefcase of 8 million dollars appears]
- 00:59
dieted down to only five million bucks which now come your way via your
- 01:03
residual claim to assets fingers crossed your next investment goes a bit better
- 01:08
but hopefully this one will put a little hair on your chest it happens [Man with hairy chest appears]
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