A dividend is a payment made by a corporation to its shareholders out of its profits or reserves. It is not a payment made to bondholders or the corporation's board of directors, nor is it a payment made to banks or other sources of funding for the corporation.

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A Dividend Is the

Question 101

Multiple Choice

A dividend is the

A) corporation's periodic payments to bondholders.
B) the monthly compensation to the corporation's board of directors.
C) a payment of some of the corporation's profits to its stockholders.
D) a payment made to banks and other sources of funding for the corporation.

Correct Answer: