Payments made out of a ﬁrm's earnings to its owners in the form of cash or equity are called:

Question

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Dividends are payments made to a firm's owners (shareholders) out of its earnings in the form of cash or equity. Distributions, share repurchases, and stock splits are also ways for a firm to distribute its profits, but they are not always made directly to the owners and may involve different mechanisms. Payments-in-kind are not typically used to distribute earnings to owners.

Payments Made Out of a ﬁRm's Earnings to Its Owners