Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, it is able to pay a proportion of the profit as a dividend to shareholders.

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A Dividend Is

Question 81

Multiple Choice

A dividend is

A) a payment to the corporation's bondholders
B) the same as the profit of the corporation
C) a payment of a portion of the corporation's profits to the shareholders
D) guaranteed if one has common stock
E) the payment to each partner in a partnership form of business

Correct Answer: