Question

16 Payments made out of a firm's earnings to its owners in the form of cash...

16

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.
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Answer #1

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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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