Asked by Pavlog Pawluk on May 08, 2024
Verified
When a company distributes some of their profits to shareholders, it is in the form of:
A) cumulative stock.
B) reduced taxes.
C) dividends.
D) bonds.
Dividends
Payments made by a corporation to its shareholder members, usually as a distribution of profits.
Profits
Profits represent the financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the operation.
- Evaluate dividend payouts for preferred and common stock under multiple contexts, including those that are cumulative and non-cumulative, as well as participating and nonparticipating preferences.
Verified Answer
KB
Katsuky BakugooMay 15, 2024
Final Answer :
C
Explanation :
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a company earns a profit or surplus, it is able to pay a proportion of the profit as a dividend to shareholders.
Learning Objectives
- Evaluate dividend payouts for preferred and common stock under multiple contexts, including those that are cumulative and non-cumulative, as well as participating and nonparticipating preferences.