What are liquidation rights of stockholders?

Liquidation rights of stockholders refer specifically to the entitlements that arise when a company is in the process of dissolving and settling its financial obligations. In this context, stockholders have the right to claim any assets that remain after all liabilities, such as debts and obligations to creditors, have been fully satisfied.

This means that once all outstanding debts to creditors are paid off, the remaining assets of the company can be distributed to shareholders. The hierarchy typically dictates that creditors are paid first, followed by preferred shareholders (if applicable), and finally common shareholders receive what is left, if anything. Therefore, the correct answer reflects this priority in the distribution of assets during liquidation, confirming that stockholders are entitled to claim remaining assets only after all liabilities have been accounted for.