Question

Research and then discuss the two types of equity found on the balance sheet that contribute to total stockholder’s equity for the corporation. With respect to rewarding stockholder investment, which of these components of equity is most important? Explain why?

Answer 1

The equity on the balance sheet that contribute to total stockholder’s equity for the corporation are:

• stockholders' equity
• owner's equity

What is a total stockholder’s equity?

The total stockholders' equity means the total value of assets that remains in a business after all the total liabilities have been settled.

However, the stockholders' equity is the most important for rewarding stockholder investment because it is the basis at which a dividend for the stockholder will be calculated.

Read more about stockholder equity

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