Who are the owners of retained earnings in a corporation?

Retained earnings represent the portion of a company's profit that is not distributed to shareholders as dividends but is instead reinvested in the business or kept as a reserve for future use. The ownership of retained earnings belongs to the shareholders, as these earnings are generated from the company’s operations, which are ultimately aimed at benefiting them.

When a corporation earns profits, it has the discretion to either pay dividends to shareholders or retain those earnings to reinvest in the business, fund new projects, or pay down debt. Shareholders, as the owners of the corporation, have a claim on these retained earnings because they reflect the success and growth of the business, which can potentially lead to increased shareholder value over time.

In this context, other groups mentioned do not have ownership over retained earnings. Management may make decisions about how to use the earnings, but they do not own them. Bondholders have a stake in the company through its debt but do not own equity or retained earnings. Customers may benefit from the company’s operations, but they do not have ownership or claims over retained earnings. Thus, the correct answer appropriately identifies shareholders as the rightful owners of retained earnings in a corporation.