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Payments made out of a firm's earnings to its owners in the form of cash or stock are called:
A. |
stock splits. |
|
B. |
distributions. |
|
C. |
share repurchases. |
|
D. |
payments - in - kind. |
|
E. |
dividends. |
Ans:
Payments made out of a firm's earnings to its owners in the form of cash or stock are called dividends.
Dividend refers to a reward or cash that a company gives to its shareholders. Dividends can be issued in various forms, such as cash payment, stocks or any other form. A company’s dividend is decided by its board of directors and it requires the shareholders’ approval. However, it is not obligatory for a company to pay dividend. Dividend is usually a part of the profit that the company shares with its shareholders.
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