Question

Who are residual owners and how can they earn winning from maximizing stock price?

Answer 1

Residual owners refer to equity shareholders of the company. Equity shareholders are paid on the basis of earnings of the company and do not get a fixed dividend. They receive what is left after all other claims on the company's income and assets have been settled.

Unlike bond, loan or preferance shares, equity shares irredeemable, except buy back of the equity shares. So the shareholders receive dividend based on earnings of the company & amount available to distribute. Whatever earning retaining by the company within business for expansion will add value to the share of the company.

If one shareholder wants to redeem his shares, he can sell it in secondary market. He will earn high return if stock price is maximised.