Equal shares of a firm's profit are paid out to stockholders as:

Question

Quizplus · Accepted Answer

Dividends are the payments made by a firm to its stockholders as a reward for their investments. These payments are a share of the profits earned by the firm, distributed in equal proportions to each shareholder. Interest is a payment made by borrowers to lenders for the use of funds, not profits. Capital gains are the profits earned from the sale of an asset, and net earnings refer to the total earnings of a firm before any payments are made to stockholders or other parties. Therefore, the best choice is B) Dividends.

Equal Shares of a Firm's Profit Are Paid Out to Stockholders