Which of the following best defines the "residual right" of shareholders?

The term "residual right" in the context of shareholders primarily refers to the rights they hold to the assets of a corporation after all other claims have been settled, particularly in the event of liquidation. This means that once creditors are paid and any secured obligations are fulfilled, it is the shareholders who have a claim to the remaining assets of the corporation.

Choosing this option reflects an understanding of the priority of claims in a corporate structure. Shareholders are at the end of the line when it comes to claims on a company's assets; everyone else must be satisfied first, including creditors and other stakeholders. Thus, the "residual right" effectively symbolizes the potential for shareholders to benefit from whatever is left over after all debts and obligations have been satisfied. This aligns closely with the definition of equity ownership and the risk/reward scenario faced by investors in a business setting.

In contrast, while rights to dividends, voting on corporate matters, and nominating directors are important aspects of shareholder rights, they do not specifically pertain to the concept of residual rights. Dividends relate to the company's profit distribution, voting impacts corporate governance, and nominating directors pertains to control rather than residual claims on assets. Therefore, the best definition of "residual right"