Which of the following terms defines the rights of shareholders in a corporation to residual assets after liabilities are paid?

The correct term that defines the rights of shareholders in a corporation to residual assets after liabilities are paid is Owner's Equity. Owner's equity represents the ownership interest of shareholders in a corporation and encompasses the residual interest in the assets of the company after all liabilities have been settled. It can also be understood as the net assets of the company; that is, total assets minus total liabilities.

For shareholders, this means that once all debts and obligations to creditors are satisfied, they have a claim on what remains, represented as owner's equity. This can include retained earnings and additional paid-in capital, and it reflects the value that shareholders would theoretically receive if the corporation were to liquidate.

Understanding this concept is crucial for anyone studying corporate finance or economics, as it indicates the financial health of a company and the potential returns for shareholders, such as through dividends or capital gains when the stock is sold.